Cantillon Effect

  • It is named after the 18th century French economist Richard Cantillon who published his ideas in the 1755 book Essay on the Nature of Trade in General.
  • It explains the relationship between the general money supply and the prices of goods. According to the Cantillon effect, when new money circulates into the economy, asset prices increase at varying rates.
  • As new money initially enters the economy through central banks, private equity firms, and government institutions, these organizations have a greater purchasing power over the general public.
  • Thus, the Cantillon effect describes the disproportionate outcome money injection has on different ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material since 2018 of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

News Snippets