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Friedman was a Nobel prize winning American economist who developed the economic school of thought known as "monetarism". This school rejected the Keynesian approach in the mid-1970s. The major difference was that monetarism proposes that increases in the money supply, above the real growth of the economy, are reflected directly in inflation. This can be summed up by the tautological equation MV = PT where M is the money supply, V is the velocity of circulation, P is the level of prices and T is the number of transactions. Friedman propose that V and T were fairly stable so that changes to M were reflected in P.

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