Meaning: The quote you provided is from Dudley North, an English economist who lived in the 17th century. In this quote, North is discussing the relationship between interest rates and the flow of money into and out of trade. He argues that lowering interest rates may deter some money from entering trade, while high interest rates encourage money to flow out of trade.

To understand this quote in more depth, it's important to consider the economic context in which Dudley North was writing. During North's lifetime, England was undergoing significant economic changes, including the transition from a feudal economy to a more modern, commercial economy. The role of trade and finance was becoming increasingly important, and economists like North were grappling with the complexities of these developments.

North's statement reflects his views on the impact of interest rates on economic activity. In his time, interest rates were a crucial factor in determining the cost of borrowing and the return on investment. By suggesting that lowering interest rates might deter money from entering trade, North is acknowledging the influence of interest rates on the behavior of market participants.

One interpretation of North's statement is that when interest rates are low, individuals and businesses may be less inclined to invest in trade and commerce because the potential returns are not as attractive. In other words, the cost of borrowing may not be offset by the expected profits from engaging in commercial activities. This could lead to a situation where money is retained or invested in other assets, rather than being channeled into trade.

Conversely, North argues that high interest rates have the opposite effect, attracting money out of trade. This suggests that when interest rates are high, the potential returns from lending money or investing in interest-bearing assets may outweigh the benefits of engaging in trade. As a result, individuals and businesses may be more inclined to withdraw funds from trade-related activities and allocate them to interest-bearing investments.

North's observations about the relationship between interest rates and the flow of money into and out of trade have implications for monetary policy and economic decision-making. Central banks and policymakers often adjust interest rates as a tool to influence economic activity. North's insights highlight the potential unintended consequences of interest rate changes and the need for careful consideration of the broader effects on investment and trade.

In summary, Dudley North's quote reflects his understanding of the impact of interest rates on the flow of money into and out of trade. His observations provide valuable insights into the complex relationship between interest rates, investment decisions, and economic activity, shedding light on the dynamics of a commercial economy in transition.