 Price–specie flow mechanism

The price–specie flow mechanism is a model developed by Scottish economist David Hume (1711–1776) to illustrate how trade imbalances can self-correct and adjust under the gold standard.Hume expounded his argument in "Of the Balance of Trade", which he wrote to counter the Mercantilist idea that a nation should strive for a positive balance of trade (i.e., greater exports than imports).