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The Monetary Origins of the Price Revolution' Before the Influx of Spanish-American Treasure: the South German Silver-Copper Trades, Merchant-Banking, and Venetian Commerce, 1470-1540

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  • John H. Munro

Abstract

This paper seeks to provide a new and chiefly monetary explanation for the origins of the sixteenth-century era of sustained inflation (c.1520 - c.1640) commonly known as the Price Revolution'; and in particular it provides an answer to the question: not, as traditionally posed, why did the Price Revolution commence so early; but rather why did it commence so late? Beginning with the French philosopher Jean Bodin (1568) and culminating with Earl Hamilton and Keynes (1929, 1936), most economists and historians had attributed this sustained European inflation to the influx of Spanish-American treasure', chiefly silver from Peru- Bolivia and Mexico. But with advances in our knowledge of price history in the post-war era, economic historians pointed out that European inflation had commenced as early as the 1520s, some three decades before any substantial amounts of silver had been imported from the Americas. They therefore sought an alternative explanation: unfortunately, one that wrongly made population growth the prime mover' for inflation, with grave deficiencies in their economic theory. Most have confused a change in relative prices (e.g. a rise in wheat prices) with a change in the overall price level (CPI). Only one (Jack Goldstone) has sought to link population growth, and urbanization in particular, to monetary variables: i.e. to changes in payment structures and thus to the income velocity of money (or to changes in Cambridge k).

Suggested Citation

  • John H. Munro, 1999. "The Monetary Origins of the Price Revolution' Before the Influx of Spanish-American Treasure: the South German Silver-Copper Trades, Merchant-Banking, and Venetian Commerce, 1470-1540," Working Papers munro-99-02, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:munro-99-02
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    File URL: https://www.economics.utoronto.ca/public/workingPapers/UT-ECIPA-MUNRO-99-02.pdf
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    Cited by:

    1. Munro, John H., 2004. "Before and after the Black Death: money, prices, and wages in fourteenth-century England," MPRA Paper 15748, University Library of Munich, Germany.
    2. Matias Vernengo, 2005. "Money and Inflation: A Taxonomy," Working Paper Series, Department of Economics, University of Utah 2005_14, University of Utah, Department of Economics.
    3. Fry, J. M. & Masood, Omar, 2011. "Testable implications of economic revolutions: An application to historic data on European wages," MPRA Paper 32812, University Library of Munich, Germany.

    More about this item

    Keywords

    gold; silver; bullion; mining; inflation; Price Revolution; public finance; Spanish America; South Germany; England; Venice; Antwerp.;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • G2 - Financial Economics - - Financial Institutions and Services
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations
    • N2 - Economic History - - Financial Markets and Institutions
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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