American treasure and the decline of Spain

Carlos J. Charotti, Nuno Palma, João Pereira dos Santos

Research output: Working paperDiscussion paper


Spain was one of the world’s richest countries and a first-rank European power around 1500.
Two centuries later it was a backwater. In this paper, we study the long-run impact of the influx
of silver from the New World since 1500 for the economic development of Spain. Compared with
a synthetic counterfactual, the price level in Spain increased by up to 200% more by the midseventeenth century. Spain’s GDP per capita outperformed other European nations for around
a century: by 1600, it was close to 40% higher than in its counterfactual. However, this effect
was reversed in the following 150 years: by 1750, GDP per capita was 40% lower than it would
have been if Spain had not been the first-wave receiver of the American treasure.
Original languageEnglish
PublisherThe University of Manchester
Number of pages54
Publication statusPublished - Jan 2022

Publication series

NameEconomics Discussion Paper Series
PublisherThe University of Manchester


  • Resource Curse
  • Dutch Disease
  • State Capture
  • Early Modern Spain
  • Augmented Synthetic Control


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