SPENDING A WINDFALL

• 成果类型: Article
• 署名作者: Palma, Nuno; Silva, Andre C.
• 署名单位: University of Manchester; Universidade de Lisboa; Institute of Social Sciences, University of Lisbon (ICS-UL); Centre for Economic Policy Research - UK; Universidade Nova de Lisboa
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12662
• 发表日期: 2024
• 页码: 283-313
• 关键词: economic-growth; Great divergence; long-run; prices; TRADE; GLOBALIZATION; inflation; treasure; standard; demand

摘要

We study the effect of the discovery of precious metals in America from 1500 to 1810 on international trade. Around 1500, there was a simultaneous discovery of precious metals and new trading routes. We construct a counterfactual of new routes but no precious metals. The discovery of precious metals increased the stock of precious metals more than 10-fold. We show that Euro-Asian trade at its peak increased up to 20 times compared with the counterfactual. Our simulations match the observed price dynamics. We find that precious metals were at least as important as the new routes.