Friedman Theory of Money

Milton Friedman developed a similar approach to the demand for money. Friedman theory was a generalization of older quantity theory of money in which he treated money as one among the several assets including bonds, stocks and goods. Friedman focused that in principle any category of spending on GDP could be a substitute for money and might be stimulated by the expansion of real money supply because he viewed a wide range of assets as being substitutes for money than Tobin. Friedman viewed monetary policy as having more important effect on spending.