Monetary Theory And Policy From Hume And Smith ... Apr 2026

: If a country gains more gold (specie), its prices rise. This makes its exports expensive and imports cheap, causing gold to flow out until equilibrium is restored.

In The Wealth of Nations (1776), Smith focused less on Hume’s international flow mechanism and more on how banking could catalyze economic growth. Monetary Theory and Policy from Hume and Smith to Wicksell Monetary Theory and Policy from Hume and Smith ...

Hume’s primary contribution was the , which he used to dismantle the mercantilist obsession with hoarding gold. : If a country gains more gold (specie), its prices rise