Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2022-09-08
Revision-Date: 2024-07-01
Number: 22-063/VI
Author-Name: Yao Chen
Author-Workplace-Name: Erasmus University Rotterdam and CEPR
Author-Name: Nuno Palma
Author-Workplace-Name: University of Manchester, Universidade de Lisboa & CEPR
Author-Name: Felix Ward
Author-Workplace-Name: Erasmus University Rotterdam
Title: Goldilocks: American precious metals and the Rise of the West
Abstract: We estimate the contribution of the American precious metal windfall to West Eu- rope’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 West Europe’s growth by stimulating trade and capital accumulation. Our findings place West 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.
Classification-JEL: E51, F40, N10
Keywords: money non-neutrality, Great Divergence, Little Divergence, Smithian growth, market integration
File-URL: https://papers.tinbergen.nl/22063.pdf
File-Format: application/pdf
File-Size: 2.638.729 bytes
Handle: RePEc:tin:wpaper:20220063