----------------- HES POSTING ----------------- Brad DeLong wrote: << There is the old _A Program for Monetary Stability_ response: if velocity is unstable, impose regulations on the banking system--100% reserves, and so forth--until velocity is stable...>> Speaking in terms of the EOE model, there is also a question as to which form of the model is the most appropriate for determining the efficient growth rate in total money, that is, should we adopt the transactions or income approach? Before Friedman, those advocating the money-growth rule were generally split into two camps. For example, Carl Synder favored the use of Vt and T, transactions velocity and total transactions, while Lionel Edie favored Vy and Y, income velocity and current output. Unfortunately, the question was never resolved as all research on the transactions approach came to a halt long before Friedman's rise to social prominence as an advocate of the Cambridge approach to monetary theory. Chas Anderson ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]