2.6. The Increase and Decrease of the Quantity of Money in a State

An Essay on Economic Theory by Richard Cantillon

Tags: Monetary Theory, Value and Exchange

12/01/2014 Richard Cantillon

Here Cantillon uses his price-specie flow mechanism to analyze some of the effects of inflation. Increasing the supply of money by mining hurtssome people and benefits others because certain prices and incomes rise faster than others. However, if the new money is accumulated and saved by those who successfully export goods, either because of superior quality or more efficient transportation, it will lead to higher standards of living.

From Part 2: Money and Interest. Narrated by Millian Quinteros.

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