Monetary Theory And Policy From Hume And Smith ... Guide

The monetary theories of David Hume and Adam Smith represent the bedrock of classical economics, establishing how money interacts with prices, trade, and banking. While they were close friends, their views on how money impacts an economy differed significantly. David Hume: The Price-Specie Flow Mechanism

: He famously described money as the "oil which renders the motion of the wheels more smooth," but not part of the wheels themselves. In the long run, doubling the money supply only doubles prices without increasing real wealth. Monetary Theory and Policy from Hume and Smith ...

: Hume favored a 100% specie-reserve system for banks to prevent the artificial "paper-money" inflation that disrupts the natural flow of gold. 🏦 Adam Smith: Banking and the Real Bills Doctrine The monetary theories of David Hume and Adam