IDEAS home Printed from https://ideas.repec.org/p/hes/wpaper/0170.html
   My bibliography  Save this paper

The vagaries of the sea: evidence on the real effects of money from maritime disasters in the Spanish Empire

Author

Listed:
  • Adam Brzezinski

    (Department of Economics, University of Oxford)

  • Yao Chen

    (Erasmus School of Economics, Erasmus University Rotterdam)

  • Nuno Palma

    (Department of Economics, University of Manchester; Instituto de Ciências Sociais, Universidade de Lisboa; CEPR)

  • Felix Ward

    (Erasmus School of Economics, Erasmus University Rotterdam)

Abstract

We exploit a recurring natural experiment to identify the effects of money supply shocks: maritime disasters in the Spanish Empire (1531-1810) that resulted in the loss of substantial amounts of monetary silver. A one percentage point reduction in the money growth rate caused a 1.3% drop in real output that persisted for several years. The empirical evidence highlights nominal rigidities and credit frictions as the primary monetary transmission channels. Our model of the Spanish economy confirms that each of these two channels explain about half of the initial output response, with the credit channel accounting for much of its persistence.

Suggested Citation

  • Adam Brzezinski & Yao Chen & Nuno Palma & Felix Ward, 2019. "The vagaries of the sea: evidence on the real effects of money from maritime disasters in the Spanish Empire," Working Papers 0170, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0170
    as

    Download full text from publisher

    File URL: http://www.ehes.org/EHES_170.pdf
    Download Restriction: no

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The vagaries of the sea: evidence on the real effects of money from maritime disasters in the Spanish Empire
      by Christian Zimmermann in NEP-DGE blog on 2019-11-22 17:14:55

    More about this item

    Keywords

    Monetary Shocks; Natural Experiment; Nominal Rigidity; Financial Accelerator; DSGE; Minimum-Distance Estimation; Local Projection;

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hes:wpaper:0170. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Sharp). General contact details of provider: http://edirc.repec.org/data/ehessea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.