American treasure and the decline of Spain

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

American treasure and the decline of Spain

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

NOVA School of Business and Economics (NOVA SBE)

Research output: Working paper › Discussion paper

Abstract

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 language	English
Publisher	The University of Manchester
Number of pages	54
Publication status	Published - Jan 2022

Publication series

Name	Economics Discussion Paper Series
Publisher	The University of Manchester
No.	EDP-2201

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

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

Access to Document

http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-2201.pdfLicence: Unspecified

Cite this

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AU - Pereira dos Santos, João

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N2 - 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.

AB - 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.

KW - Resource Curse

KW - Dutch Disease

KW - State Capture

KW - Early Modern Spain

KW - Augmented Synthetic Control

M3 - Discussion paper

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BT - American treasure and the decline of Spain

PB - The University of Manchester

ER -

American treasure and the decline of Spain

Abstract

Publication series

UN SDGs

Keywords

Access to Document

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Cite this