https://blog.nath.page/tags/palyi/ Recent content in Palyi on blog.nath.page Hugo en-us Sun, 28 Jun 2026 00:00:00 +0000 https://blog.nath.page/posts/psf/ Sun, 28 Jun 2026 00:00:00 +0000 https://blog.nath.page/posts/psf/ <h2 id="the-price-specie-flow-mechanism">The Price-Specie-Flow Mechanism</h2> <p>The price-specie-flow (PSF) mechanism is the extension of <a href="https://blog.nath.page/posts/qtm/">the quantity theory of money</a> (QTM) to a multi-country scenario. Proponents of the end-neutrality of QTM often implicitly assume a closed economy. But when nations trade amongst each other, the injection of monetary units in a nation can, instead of putting upward pressure on local prices, promote imports, and thus cause an outflow of money, in the short term. The price-specie-flow mechanism accounts for these dynamics.</p>