The Cantillon Effect

« Back to Glossary Index

It was developed by Richard Cantillon and refers to a change in the relative prices that results from a change in the money supply. It usually describes the velocity of money via the economy and the uneven effect that its diffusion possesses on wages, prices and inflation. The Cantillon Effect is also applied to digital assets and the most common example could be observed when the Bitcoin price surpassed $60,000 for the first time back in March 2020 following the stimulus package that was passed by the house.

« Back to Glossary Index