Richard Cantillon (1680–1734): Money Flows Like a River—Fluctuating and Uneven

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

Chapter Chapter 13 in Currency and Credit Money, 2026, pp 131-138 from Springer

Abstract: Abstract This chapter presents Cantillon’s monetary theory, integrating value theory, quantity theory, and distributional analysis. He defines money as a commodity while emphasizing short-term price fluctuations driven by supply and demand. Cantillon refines the Quantity Theory of Money by introducing velocity and rejecting strict proportionality. His major contribution is the analysis of the transmission mechanism, showing how monetary expansion affects prices unevenly across sectors—the “Cantillon effect.” He also examines international trade and the balance of payments. This chapter highlights Cantillon’s role in advancing monetary theory beyond simple quantity explanations toward a more dynamic and microeconomic understanding.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spshcp:978-3-032-24113-9_13

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DOI: 10.1007/978-3-032-24113-9_13

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