: Hume favored a 100% specie-reserve system for banks to prevent the artificial "paper-money" inflation that disrupts the natural flow of gold. 🏦 Adam Smith: Banking and the Real Bills Doctrine
Hume’s primary contribution was the , which he used to dismantle the mercantilist obsession with hoarding gold. Monetary Theory and Policy from Hume and Smith ...
In The Wealth of Nations (1776), Smith focused less on Hume’s international flow mechanism and more on how banking could catalyze economic growth. Monetary Theory and Policy from Hume and Smith to Wicksell : Hume favored a 100% specie-reserve system for
: He famously described money as the "oil which renders the motion of the wheels more smooth," but not part of the wheels themselves. In the long run, doubling the money supply only doubles prices without increasing real wealth. Monetary Theory and Policy from Hume and Smith ...