: Hume argued that the price level of a country is directly proportional to its money supply.
: If a country gains more gold (specie), its prices rise. This makes its exports expensive and imports cheap, causing gold to flow out until equilibrium is restored. Monetary Theory and Policy from Hume and Smith ...
Hume’s primary contribution was the , which he used to dismantle the mercantilist obsession with hoarding gold. : Hume argued that the price level of
: 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 ...