ABSTRACT
JoanRobinsonneverthoughthighlyoftheQuantityTheoryofMoney:''The archetypalquantitytheoryformulaMV=PY,likeanyidentity,hastohaveits termsdefinedinsuchawayastomakeithold." 1Shefollowswithalistof queriesastowhattheelementsoftheequationmean,designedtorevealthe potentialambiguities.Oncewehavemanagedtosetitup,however,wearestill onlyhalfwaytoausefultoolofanalysis;thenextproblemiswhethercausality runsfromlefttoright,asmonetaristsmaintain,orfromrighttoleft:
SupposethatbetweenoneyearandthenextPYrises;eitheractivityhas increased-employmentandoutputarehigherthisyearthanlast,orthegeneralpricelevelhasrisenbecauseofariseincostsinmoneyterms;thenifthe quantityofmoneyhasnotincreased,thevelocityofcirculationmusthave risen.2
