Friedman's Money Supply Volatility Hypothesis: Some International Evidence.

The article presents commentary and additional empirical evidence regarding the money supply volatility hypothesis of Milton Friedman, modeling the U.S. decline in income velocity in the 1980s as a result of volatile money supply growth. Support of this theory regarding Granger-causation analysis is cited and additional data is provided by the author from nine non-U.S. industrialized nations. The data suggests certain examples of evidence for Friedman's theory, but generally invalidates the general application of the principle.