A framework is presented for investigating bivariate causal relations using Granger’s notion of causality. This framework is employed to test the relationship between the money supply and prices in Bangladesh using monthly data for the period 1973 to 1986. The results indicate evidence of significant unidirectional feedback running from prices to money. The analysis is extended to investigate the relationship between rates of change in money and prices and once again there is evidence of feedback from prices to money. The main conclusion is that strict exogeneity of the money supply is rejected. These results are consistent with a “structuralist” view of the Bangladesh economy. Policy implications are briefly discussed.