Specie-Flow Mechanism

  • Takashi Negishi
Part of the Research Monographs in Japan-U.S. Business & Economics book series (JUSB, volume 6)


The classical economists, who followed Adam Smith, did not doubt that the arguments of their predecessors, the mercantilists, in favour of a chronic export surplus were based on an intellectual confusion. The classical refutation of the mercantilist principle is derived from the so-called Cantillon-Hume price-specie-flow mechamism. By this mechanism an inflow of bullion raises domestic prices, and selling dear and buying cheap tends to turn the balance of trade against the country. Purely automatic forces tend, therefore, to establish a natural distribution of specie between the trading countries of the world and there is a level of domestic prices such that each country’s value of exports equals that of imports.


International Trade Domestic Prex Neighbouring Nation Domestic Good Gold Price 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Cantillon, R., 1931, Essai sur la nature du commerce en general, H. Higgs, ed., London: Macmillan.Google Scholar
  2. Dornbusch, R. S., S. Fischer and P. A. Samuelson, 1976, “Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods,” American Economic Review, 67, pp. 823–839.Google Scholar
  3. Dornbusch, R. S., and M. Mussa, 1975, “Consumption, Real Ballance and the Hoarding Function,” International Economic Review, 16, pp. 415–421.CrossRefGoogle Scholar
  4. Hume, D., 1955, Writings on Economics, E. Rotwein ed., London: Nelson.Google Scholar
  5. Kemp, M. C., 1964, The Pure Theory of International Trade, Engelwood Cliffs, N.J.: Prentice-Hall.Google Scholar
  6. Staley, C. E., 1976, “Hume and Viner on International Adjustment Mechanism,” History of Political Economy, 8, pp. 252–265.CrossRefGoogle Scholar
  7. Viner, J., 1937, Studies in the Theory of International Trade, New York: Harper.Google Scholar

Copyright information

© Springer Science+Business Media New York 2001

Authors and Affiliations

  • Takashi Negishi
    • 1
  1. 1.Aoyama Gakuin UniversityJapan

Personalised recommendations