IDEAS home Printed from https://ideas.repec.org/p/hes/wpaper/0174.html
   My bibliography  Save this paper

American Precious Metals and their Consequences for Early Modern Europe

Author

Listed:
  • Nuno Palma

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

Abstract

Over the early modern period and beyond, massive amounts of silver and gold were found and mined in the Americas. In this paper, I review the consequences for the European economies. Some second-order receiver countries such as England benefited in both the short and long run. First-order receivers such as Spain and Portugal also benefited in the short-run, but their continued exposure to the arrival of massive quantities of precious metals eventually led to loss of competitiveness and an institutional resource curse.

Suggested Citation

  • Nuno Palma, 2019. "American Precious Metals and their Consequences for Early Modern Europe," Working Papers 0174, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0174
    as

    Download full text from publisher

    File URL: https://www.ehes.org/wp/EHES_174.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mikołaj Malinowski & Jan Luiten Zanden, 2017. "Income and its distribution in preindustrial Poland," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(3), pages 375-404, September.
    2. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    3. Francois R. Velde & Warren E. Weber, 2000. "A Model of Bimetallism," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1210-1234, December.
    4. Lucas, Robert E, Jr, 1996. "Nobel Lecture: Monetary Neutrality," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 661-682, August.
    5. Galiani,Sebastian & Sened,Itai (ed.), 2019. "Institutions, Property Rights, and Economic Growth," Cambridge Books, Cambridge University Press, number 9781108725675, November.
    6. Karaman, K. Kıvanç & Pamuk, Şevket & Yıldırım-Karaman, Seçil, 2020. "Money and monetary stability in Europe, 1300–1914," Journal of Monetary Economics, Elsevier, vol. 115(C), pages 279-300.
    7. Drelichman, Mauricio, 2007. "Sons of Something: Taxes, Lawsuits, and Local Political Control in Sixteenth-Century Castile," The Journal of Economic History, Cambridge University Press, vol. 67(3), pages 608-642, September.
    8. Hough,Jerry F. & Grier,Robin, 2015. "The Long Process of Development," Cambridge Books, Cambridge University Press, number 9781107670419.
    9. Klein, Julius, 1920. "The Mesta: A Study in Spanish Economic History 1273-1836," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number klein1920.
    10. António Henriques & Nuno Palma, 2023. "Comparative European Institutions and the Little Divergence, 1385–1800," Journal of Economic Growth, Springer, vol. 28(2), pages 259-294, June.
    11. Prados de la Escosura, Leandro, 2000. "International Comparisons of Real Product, 1820-1990: An Alternative Data Set," Explorations in Economic History, Elsevier, vol. 37(1), pages 1-41, January.
    12. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    13. 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).
    14. North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 803-832, December.
    15. Nuno Palma, 2019. "The Real Effects of Monetary Expansions: Evidence from a Large-Scale Historical Natural Experiment," Economics Discussion Paper Series 1904, Economics, The University of Manchester, revised Aug 2021.
    16. Wallis, Patrick & Colson, Justin & Chilosi, David, 2018. "Structural change and economic growth in the British economy before the Industrial Revolution, 1500-1800," LSE Research Online Documents on Economics 84510, London School of Economics and Political Science, LSE Library.
    17. Krantz, Olle, 2017. "Swedish GDP 1300-1560: A Tentative Estimate," Lund Papers in Economic History 152, Lund University, Department of Economic History.
    18. Adam Brzezinski & Roberto Bonfatti & K. KıvançKaraman & Nuno Palma, 2020. "Monetary Capacity," Economics Series Working Papers 926, University of Oxford, Department of Economics.
    19. Palma, Nuno & Reis, Jaime, 2019. "From Convergence to Divergence: Portuguese Economic Growth, 1527–1850," The Journal of Economic History, Cambridge University Press, vol. 79(2), pages 477-506, June.
    20. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521719254, November.
    21. Daron Acemoglu & Simon Johnson & James Robinson, 2005. "The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth," American Economic Review, American Economic Association, vol. 95(3), pages 546-579, June.
    22. Nuno Palma, 2018. "Reconstruction of money supply over the long run: the case of England, 1270–1870," Economic History Review, Economic History Society, vol. 71(2), pages 373-392, May.
    23. Leonor Freire Costa & Nuno Palma & Jaime Reis, 2015. "Editor's choice The great escape? The contribution of the empire to Portugal's economic growth, 1500–1800," European Review of Economic History, European Historical Economics Society, vol. 19(1), pages 1-22.
    24. Herman J. Jong & Nuno Palma, 2018. "Historical National Accounting," Palgrave Studies in Economic History, in: Matthias Blum & Christopher L. Colvin (ed.), An Economist’s Guide to Economic History, chapter 46, pages 395-403, Palgrave Macmillan.
    25. Lennart Schon & Olle Krantz, 2012. "The Swedish economy in the early modern period: constructing historical national accounts," European Review of Economic History, European Historical Economics Society, vol. 16(4), pages 529-549, November.
    26. Glassman, Debra & Redish, Angela, 1985. "New Estimates of the Money Stock in France, 1493–1680," The Journal of Economic History, Cambridge University Press, vol. 45(1), pages 31-46, March.
    27. Wallis, Patrick & Colson, Justin & Chilosi, David, 2018. "Structural Change and Economic Growth in the British Economy before the Industrial Revolution, 1500–1800," The Journal of Economic History, Cambridge University Press, vol. 78(3), pages 862-903, September.
    28. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521895026, November.
    29. Galiani,Sebastian & Sened,Itai (ed.), 2014. "Institutions, Property Rights, and Economic Growth," Cambridge Books, Cambridge University Press, number 9781107041554, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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," Economics Discussion Paper Series 1906, Economics, The University of Manchester, revised May 2022.
    2. Chen, Yao & Palma, Nuno & Ward, Felix, 2021. "Reconstruction of the Spanish money supply, 1492–1810," Explorations in Economic History, Elsevier, vol. 81(C).
    3. Palma, Nuno & Reis, Jaime & Rodrigues, Lisbeth, 2023. "Historical gender discrimination does not explain comparative Western European development: evidence from Portugal, 1300-1900," Explorations in Economic History, Elsevier, vol. 88(C).
    4. Kedrosky, Davis & Palma, Nuno, 2021. "The Cross of Gold: Brazilian Treasure and the Decline of Portugal," CAGE Online Working Paper Series 574, Competitive Advantage in the Global Economy (CAGE).
    5. Adam Brzezinski & Roberto Bonfatti & K. KıvançKaraman & Nuno Palma, 2020. "Monetary Capacity," Economics Series Working Papers 926, University of Oxford, Department of Economics.
    6. Palma, Nuno & Santiago Caballero, Carlos, 2019. "Patterns of Iberian economic growth in the early modern period," IFCS - Working Papers in Economic History.WH 29185, Universidad Carlos III de Madrid. Instituto Figuerola.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leticia Arroyo Abad & Nuno Palma, 2020. "The Fruits of El Dorado: The Global Impact of American Precious Metals," Working Papers 0179, European Historical Economics Society (EHES).
    2. António Henriques & Nuno Palma, 2023. "Comparative European Institutions and the Little Divergence, 1385–1800," Journal of Economic Growth, Springer, vol. 28(2), pages 259-294, June.
    3. Chen, Yao & Palma, Nuno & Ward, Felix, 2021. "Reconstruction of the Spanish money supply, 1492–1810," Explorations in Economic History, Elsevier, vol. 81(C).
    4. Carlos J. Charotti & Nuno Palma & João Pereira dos Santos, 2022. "American Treasure and the Decline of Spain," Economics Discussion Paper Series 2201, Economics, The University of Manchester.
    5. Kedrosky, Davis & Palma, Nuno, 2021. "The Cross of Gold: Brazilian Treasure and the Decline of Portugal," CAGE Online Working Paper Series 574, Competitive Advantage in the Global Economy (CAGE).
    6. Palma, Nuno & Reis, Jaime & Rodrigues, Lisbeth, 2023. "Historical gender discrimination does not explain comparative Western European development: evidence from Portugal, 1300-1900," Explorations in Economic History, Elsevier, vol. 88(C).
    7. Prados de la Escosura, Leandro & Rodríguez-Caballero, C. Vladimir, 2022. "War, pandemics, and modern economic growth in Europe," Explorations in Economic History, Elsevier, vol. 86(C).
    8. Patrick K. O'Brien & Nuno Palma, 2023. "Not an ordinary bank but a great engine of state: The Bank of England and the British economy, 1694–1844," Economic History Review, Economic History Society, vol. 76(1), pages 305-329, February.
    9. Karaman, K. Kıvanç & Pamuk, Şevket & Yıldırım-Karaman, Seçil, 2020. "Money and monetary stability in Europe, 1300–1914," Journal of Monetary Economics, Elsevier, vol. 115(C), pages 279-300.
    10. Broadberry, Stephen, 2021. "Accounting for the Great Divergence: Recent Findings from Historical National Accounting," CEPR Discussion Papers 15936, C.E.P.R. Discussion Papers.
    11. Adam Brzezinski & Roberto Bonfatti & K. KıvançKaraman & Nuno Palma, 2020. "Monetary Capacity," Economics Series Working Papers 926, University of Oxford, Department of Economics.
    12. Yao Chen & Nuno Palma & Felix Ward, 2022. "Goldilocks: American precious metals and the Rise of the West," Tinbergen Institute Discussion Papers 22-063/VI, Tinbergen Institute, revised 15 Feb 2023.
    13. Jane Humphries & Jacob Weisdorf, 2019. "Unreal Wages? Real Income and Economic Growth in England, 1260–1850," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2867-2887.
    14. 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).
    15. Meissner, Christopher M., 2014. "Growth from Globalization? A View from the Very Long Run," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 8, pages 1033-1069, Elsevier.
    16. Prados de la Escosura, Leandro & Rodriguez-Caballero, Carlos Vladimir, 2020. "Growth, War, and Pandemics: Europe in the Very Long-run," CEPR Discussion Papers 14816, C.E.P.R. Discussion Papers.
    17. Alexandra M. de Pleijt & Jan Luiten van Zanden, 2016. "Accounting for the “Little Divergence”: What drove economic growth in pre-industrial Europe, 1300–1800?," European Review of Economic History, European Historical Economics Society, vol. 20(4), pages 387-409.
    18. Carlos Álvarez-Nogal & Leandro Prados De La Escosura, 2013. "The rise and fall of Spain (1270–1850)," Economic History Review, Economic History Society, vol. 66(1), pages 1-37, February.
    19. Nuno Palma, 2019. "The Real Effects of Monetary Expansions: Evidence from a Large-Scale Historical Natural Experiment," Economics Discussion Paper Series 1904, Economics, The University of Manchester, revised Aug 2021.
    20. Jaime Reis, 2016. "The Gross Agricultural Output of Portugal: A Quantitative, Unified Perspective, 1500-1850," Working Papers 0098, European Historical Economics Society (EHES).

    More about this item

    Keywords

    American Precious Metals; Early Modern Period; Dutch Disease; Political Institutions; Economic growth; comparative development;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    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:0174. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

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

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.