Abstract: It will be apparent from the discussion so far that mercantilism and the quantity theory of money shared a common approach which ultimately counted for more than the factors dividing them. This is the approach I have characterised as 'pure exchange' analysis. The difference between the two founding interpretations of price behaviour lay in their respective attitudes to the stability of output in the equation of exchange — attitudes which stemmed from their distinct conceptions of money. Whereas mercantilist writers identified money with capital, and consequently made the level of output a function of the stock of money available to a country, proponents of quantity theory treated output as fixed, or independently variable, magnitude, since money for them was limited to the role of a medium of circulation.
Publication Year: 1992
Publication Date: 1992-01-01
Language: en
Type: book-chapter
Indexed In: ['crossref']
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