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Goldilocks: American Precious Metals and the Rise of the West

Author

Listed:
  • Yao Chen
  • Nuno Palma
  • Felix Ward

Abstract

We estimate the contribution of the American precious metal windfall to Western Europe's growth performance in the early modern period. The exogenous nature of American precious metal extraction allows for the identification of monetary effects. We find that American precious metals fostered Western Europe's growth by stimulating trade and capital accumulation. Our findings place Western Europe's second‐stage receivers in a particularly fortunate goldilocks zone that enjoyed monetary stimulus, while being insulated against the transport‐loss induced financial crises that caused persistent damage to first‐stage receiver Spain.

Suggested Citation

  • Yao Chen & Nuno Palma & Felix Ward, 2026. "Goldilocks: American Precious Metals and the Rise of the West," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 72(1), February.
    • Handle: RePEc:bla:revinw:v:72:y:2026:i:1:n:e70045
    DOI: 10.1111/roiw.70045
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    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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