David Hume (1711–1776): The Natural Allocation of Money

Jan Greitens ()
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Jan Greitens: Johann Wolfgang Goethe-Universität

Chapter Chapter 14 in Currency and Credit Money, 2026, pp 141-151 from Springer

Abstract: Abstract This chapter analyzes Hume’s nominalist monetary theory and his critique of mercantilism. He defines money as a neutral instrument facilitating exchange, emphasizing its role as a unit of account rather than a commodity. Hume develops a refined Quantity Theory of Money, distinguishing between short-term non-neutrality and long-term neutrality. His Price–Specie Flow Mechanism explains how international imbalances are corrected through price adjustments and money flows. This chapter also highlights Hume’s skepticism toward credit money and banks. Overall, Hume provides a foundational framework for classical monetary theory, combining Quantity Theory with international adjustment mechanisms.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spshcp:978-3-032-24113-9_14

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DOI: 10.1007/978-3-032-24113-9_14

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