Finance and Trade in NUMS v. UMS

  • Paul Davidson

Abstract

Over two centuries ago, Adam Smith recognized that the growth of the wealth of any nation was dependent on its ability to foster specialization of production tasks in order to provide the economies of scale of a mass production technology. At any point in history the ability of entrepreneurs to introduce increasing specialization into production activities is limited by the size and the potential near-term growth of the market. Progress can therefore be purchased by trade with other nations. The obvious moral of Adam Smith’s analysis is that no economy which desires the rapid accumulation of wealth for itself can remain an island unto itself.

Keywords

Europe Income Assure Expense Plague 

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Notes and References

  1. 4.
    P. Davidson, ‘Keynes’s Finance Motive’, Oxford Economic Papers, 17, 1965, pp. 47–66.Google Scholar
  2. 6.
    P. Davidson, ‘A Keynesian View of Friedman’s Theoretical Framework for Monetary Analysis’ in R. J. Gordon (ed.), Milton Friedman’s Monetary Framework: A Debate With His Critics (University of Chicago Press, 1974) pp. 103–6.Google Scholar
  3. 9.
    See P. Davidson, ‘A Keynesian View of Friedman’s Monetary Theoretical Framework’ in R. J. Gordon (ed.), Milton Friedman’s Monetary Framework: A Debate With His Critics (University of Chicago Press, 1974) p. 103. This process was labelled construction funds finance in Chapter 3 supra.Google Scholar
  4. 10.
    R. F. Kahn, Selected Essays on Employment and Growth (Cambridge University Press, 1972) p. 80.Google Scholar
  5. 12.
    Cf. J. R. Hicks, Critical Essays in Monetary Theory (Oxford University Press, 1967) p. 51.Google Scholar
  6. 17.
    M. Friedman, ‘Comments on the Critics’, in R. J. Gordon (ed.), Milton Friedman’s Monetary Framework: A Debate With His Critics (University of Chicago Press, 1974) p. 151. Italics added.Google Scholar

Copyright information

© Paul Davidson 1982

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  • Paul Davidson

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