John Law (1671–1729): Money and Economic Growth

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

Chapter Chapter 9 in Currency and Credit Money, 2026, pp 97-105 from Springer

Abstract: Abstract This chapter analyzes John Law’s theory linking money, credit, and economic growth in response to monetary scarcity. Law argues that insufficient money constrains employment and production and proposes a land-backed currency to provide elasticity. He emphasizes the role of banks in expanding credit and stimulating economic activity, presenting an early Development Theory of Credit. Using his island model, this chapter illustrates how increased money supply can mobilize idle resources and transform an economy. However, law underestimates inflationary risks. This chapter concludes by contrasting his theoretical insights with the failure of his French experiment, highlighting tensions between monetary expansion and financial stability.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spshcp:978-3-032-24113-9_9

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DOI: 10.1007/978-3-032-24113-9_9

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