31
See also: The function of money 24–25 ■ The Keynesian multiplier 164–65 ■
Monetarist policy 196–201 ■ Inflation and unemployment 202–03
Jean Bodin
The son of a master tailor,
Jean Bodin was born in 1530
in Angers, France. He was
educated in Paris, and went
on to study at the University
of Toulouse. In 1560, he
became a king’s advocate in
Paris. Bodin’s scholarship (he
read law, history, politics,
philosophy, economics, and
religion) attracted royal favor,
and between 1571 and 1584,
he served as aide to the
powerful Duke of Alençon.
In 1576, he married
Françoise Trouilliart and
succeeded his brother-in-law
as the king’s procurator in
Laon, northern France.
In 1589, King Henry III was
assassinated, and religious
civil war broke out. Bodin
believed in tolerance, but in
Laon was forced to declare for
the Catholic cause, until the
victorious Protestant King,
Henry IV, took control of the
city. Bodin died of the plague,
aged 66, in 1596.Key works1566 Method for the Easy
Comprehension of History
1568 Response to the
Paradoxes of Malestroit
1576 Six Books of a
Commonwealthabundance of silver and gold was
to blame. These precious metals
were entering Spain from its new
colonies in the Americas and then
spreading throughout Europe.
Bodin’s calculations of the
increase in coinage were
remarkably accurate. Later
economists concluded that prices
in Europe quadrupled during the
16th century, at the same time as
the amount of physical silver and
gold circulating in the system
tripled; Bodin had estimated the
increase in precious metals at more
than 2.5 times. He also highlighted
other factors behind the inflation: a
demand for luxuries; a scarcity of
goods for sale due to exports and
waste; greedy merchants able to
restrict the supply of goods through
monopolies; and, of course, the
rulers adulterating the coins.The money supply
Bodin was not the first to point
to the new influence of American
treasure and the effect of the
abundance or scarcity of money
on price levels. In 1556, a Spanish
theologian named Martín de
Azpilcueta (better known as
Navarrus) had come to the same
conclusion. However, Bodin’s essay
also discussed the demand for and
the supply of money, the operation
of these two sides of an economy,
and how disturbances to the ❯❯LET TRADING BEGIN
This results in too
much money chasing
too few goods...... leading to
price rises.If more money is put
into the system...... people have more
money in their pockets and
wish to buy more goods
and services.Money causes inflation.
Money circulates at
a constant speed.