“It has been frequently assumed that V is constant; and this indeed is the cornerstone of the quantity theory of money. But it seems fairly obvious that the velocity of circulation in fact depends on the short-term rate of interest.”

Source: Theory of Economic Dynamics (1965), Chapter 6, The Short Term Rate of Interest, p. 73

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Michał Kalecki16

Polish economist 1899–1970

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“It has been frequently assumed that V is constant; and this indeed is the cornerstone of the quantity theory of money. But it seems fairly obvious that the velocity of circulation in fact depends on the short-term rate of interest.”

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Michał Kalecki16

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