ABSTRACT
Marshall’s Money, Credit and Commerce (1923) was published virtually at the end of his long professional career. There had, however, developed an oral tradition of monetary theory based on Marshall’s teaching that was to be continued chiefly by Arthur C.Pigou, Ralph Hawtrey, Dennis Robertson, and John Maynard Keynes. Keynes, especially, has pointed out that it was a theoretical breakthrough, as far as the treatment of money is concerned, for Marshall to ‘explain how each individual decides how much money to keep in a ready form as the result of a balance of advantage between this (i.e. cash) and alternative forms of wealth.’1 This emphasis was, analytically, an important shift from Irving Fisher’s equation of exchange formulation of the quantity theory. Under Marshall’s influence, it led to the Cambridge concern with cash balances (k) in place of V, the velocity with which money circulates. Marshall’s k is conceptually equal to 1/v, which is the reciprocal of V.
