RT Journal Article
T1 Where is Credit in the Price Specie Flow?
A1 Menudo Pachón, José Manuel
A1 Berdell, John
K1 History of economic thought
K1 Mercantilism
K1 Adam Smith
K1 Enlightenment
AB Standard models of the price specie flow do not consider credit. Yet Hume and preceding authors were reacting to the implosion of Law’s financial bubble. We delineate the anti-credit thesis contained within the evolution of eighteenth-century balance of payments analyses. A string of eighteenth-century authors argued over whether the balance of payments constituted a binding constraint on credit creation. As part of their analysis they considered how changes in the money supply might alter output, prices, employment, capital, and population. How new money entered the economy was often critical. We start with Law and then consider Melon, Gervaise, Vanderlint, Cantillon, Montesquieu, Hume, Steuart, Forbonnais, and Smith. In closing we pay particular attention to the idea that Hume and Smith effectively displaced preceding, often “mercantilist,” analyses of credit and the balance of payments.
PB Cambridge University Press
YR 2025
FD 2025-03-19
LK https://hdl.handle.net/10433/23569
UL https://hdl.handle.net/10433/23569
LA en
NO Journal of the History of Economic Thought, 2025, vol. 47, nº 1, p. 11-29
NO Proyecto de investigación: PID2020-115261RB-100
NO Departamento de Economía, Métodos Cuantativos e Historia Económica
DS RIO
RD May 9, 2026