The mercantilism and new financial instruments influenced the development of a new economic vision by:
1. Mercantilism:
- Mercantilism was an economic theory that focused on accumulating wealth, particularly gold and silver, through a favorable balance of trade. Countries aimed to export more than they imported to increase their wealth.
- This led to the idea that a nation's economic strength was determined by its stockpile of precious metals, fostering competition among countries to amass wealth through trade.
2. New Financial Instruments:
- The development of new financial instruments such as joint-stock companies and bills of exchange provided avenues for investment and capital formation.
- Joint-stock companies allowed investors to pool resources for large-scale ventures like colonial expeditions and trade missions, spreading risks and returns.
- Bills of exchange facilitated international trade by enabling merchants to conduct transactions without physically moving large sums of money.
3. Impact on Economic Vision:
- The emphasis on wealth accumulation and trade under mercantilism, combined with the innovative financial tools, shaped a new perspective on economics.
- This new vision highlighted the importance of international trade, investment, and financial markets in driving economic growth and prosperity.
- It laid the foundation for modern economic thought by recognizing the significance of commerce, capital flows, and market mechanisms in shaping economies.
In conclusion, mercantilism's focus on trade and wealth accumulation, coupled with the introduction of new financial instruments, played a crucial role in shaping a new economic outlook that emphasized the interconnectedness of trade, finance, and economic development.
