Thank you all for the insigtful answers. It is my 
understanding that, as Pat emphasizes, Friedman's 
restatement is not about "theory or set of
theorems about how individuals would act under 
certain conditions"; it is rather an empirical 
matter to talk about constancy or stability of 
velocity. I was really confused about the 
stability notion; is it about stability of the 
money demand function, or stability of the 
velocity itself? And, of course, does the 
stability of velocity imply stability of the 
function as well? I am indebted to Doug in this 
regard, for both his remarks about the connection 
between velocity, money demand and permanent 
income and his emphasis on the oral tradition, which makes sense to me.

But still, with respect to practical matters, I 
still believe that when it comes to monetary 
policy velocity can be thought as constant, as 
John argues. I am also struggling with the issue 
that Duncan raises: everything seems to depend on 
the definition of money (or "near-money). From 
this, can we derive any implication about the 
recent financial developments and crisis? What 
happened to the velocity in recent years? In this 
regard I am also grateful to Mason for the 
insight "New media of exchange, indeed, could be 
viewed as increasing the velocity of the older media."

Thank you all again,

Best,

Hüseyin Özel