Mercantilism- the lasting contributions

• All this pretty illogical stuff and the mercantilist literature lostits luster as soon as the
Classical school emerged in the 18th country.
• The mercantilists understood that an increase in the quantity of money increase output
and employment.while a decrease in the quantity og money decreased output and
employment.
• Affect of money on output ans employment is now seen temporary, a point the
mercantilists were not clear.
• In 1588 Giovanni botero published a theory of population(population is not limited)
• In 1588 Bernando Davanzati stated that people work in order to be happy and not for
some other motive, a form of the principle of utilitiy maximization
• Marginalist economist would later developed the idea into a full fledged theory of
demand
• In 1696 Gregory King price elasticity of demand, calculate an estimate of the price
elasticity
• Theory of international trade
• In 1663 Samual Fortrey if that would allow us to import more of what we needed than
we could at home.
• Pierre le Pesant, Seigneur de Boisguilbert tax revenge,down to stable outcome instead
of becoming chactic.
• Niccolo Machiavelli (1469-1527) the prince ,1513 the interests of the state were seen as
unrelated to religion self interested behaviour , both inductive and deductuve analysis
• The school of Salamanca; spain, develop scholastic and made innovations in monetary
economics
• The school of Salamanca; Navarrus(1491-1586) money changing was okay as long as it
earned moderate wealth for the changer , currency depend ön availability need,he
provided a unified theory of supply and demand to explain the price of all commodities,
including money. Navarrus and Jean Bodin provide the first statements of the crucial
idea that increase in the quantity of money lead to higher prices
• The school of Salamanca- money/ Thomas de Mercado (?-1585) explained why the gold
and silver in Spain eventually leaked out to other countries inflow gold and silver
american colonies led to high price in Spain
• Jean Bodin (1530-96) metals and inflation
• ENGLAND UNDER THE TUDORS. Sir Thomas Smith(1513-77)exp.nominal and
real(inflation-adjusted) especially the fact that people on fixed income are affected bu
inflation, but not traders Smith was merchantilist his views on trade policy, he had a
clear understanding how markets worked and how prices were determined.
• ----------CONCLUSION----------
• Lawyers oggicials other non-priests were beginning to write on economic issues,
• Moral issues how economi actually worked
• Besides the economies become more complex
 SEVENTEENTH-CENTURY ENGLAND
• The Royal Society
• Political ferment
• Dutch commercial power
• Balance of trade doctrine
• The rate of interest and the case for free trade
• Recoinage crisis
Francis Bacon(1561-1626): introduction from facts and experiement
Rene Descartes(1596-1650)Deduction from simple, self-evident truths
Both believed in measurement
Both rejected authory as a source of knowledge this ideas were profoundly influential
• WILLIAM PETTY
• Prepared estimates of England’s national income
• Made major contributions to national accounting
• Nnational expenditure = national income
• Mercantilist on the feed for precious metals and tariffs
• Argued that increases in the quantity of money led to decreases in interest rates this is
modern view of monetary policy
• Petty’s work on measurement = John Graunt (1620-74) and Gregory King (1648-1712)
• POLİTİCAL TURMOIL 17TH
• Writers thomas hobbes (political power )
• THOMAS HOBBES LEVIATHAN(1651)civil war in England and Germany .lawgiver.law
enforcer ,hobbes methodology became hugely influential in economic thinking,self
interested behaviour: top-down concepcion of Society
• GERARD MALYNES(1586-1641) keeping exchange value ,government regulations
increase exchange value English ccoins coreect exports and imports are responsive to
prices
• INTEREST RATES
• JOSIAH CHILD (1630-99) the government set interest rate should be lowered because
power interest rate -> greater output
• JOHN LOCKE(1632-1704) argued that lower interest rate reduce loanable funds , natural
interest rate “” quicjness of circulation"" of money (Today s VELOCITY OF MONEY)
• ----TRADE WELFARE-----
• DUDLEY NORTH(1641-91)
•