Neomerchantalism and Europe: Use of National Currency

This study discusses neomerchantalism and limited money supply policy. Neomerchantalism is to use national currency in international trade. It is appropriate for neighbour countries. Merchantalism exists in global economy during 15th-17th centuries. It is free trade. In globalism era, monetary policies are added to free trade, and it is called as neomerchantalism. It assumes that European countries and Southeast Asian countries may apply principles of neomerchantalism theory. Secondly, this study discusses limited money supply. It assumes that national central bank supplies limited region of country with money. If it supplies whole country, it creates inflation in economy. Finally, both policies, neomerchantalism and limited money supply, aim to increase total demand in an economy.

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