Mercantilism as a long-run theory
Abstract
The paper deals with the examination of critical objections to mercantilism. Criticism of mercantilism on the basis of the theory of specie flows treated in accordance with the formulation proposed by R. Cantillon and D. Hume is analyzed in detail. It is shown that the theory of specie flows is based on the shortrun assumptions upon the stability of technology and unit costs of production from period to period. A number of aspects of the mercantilist theory and policy concerning the longrun factors of the supply side that influence technology and unit costs is examined. Conclusions, stating that a) assumptions of the theory of specie flows and these of mercantilism are in conflict with each other and b) criticism of mercantilism based on the specie flows theory is incorrect, are made.
Keywords:
history of economic thought
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Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.