Goldilocks: American precious metals and the Rise of the West

Yao Chen, Nuno Palma and Felix Ward
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Yao Chen: Erasmus University Rotterdam and CEPR
Felix Ward: Erasmus University Rotterdam

No 22-063/VI, Tinbergen Institute Discussion Papers from Tinbergen Institute

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.

Keywords: money non-neutrality; Great Divergence; Little Divergence; Smithian growth; market integration (search for similar items in EconPapers)
JEL-codes: E51 F40 N10 (search for similar items in EconPapers)
Date: 2022-09-08, Revised 2024-07-01
New Economics Papers: this item is included in nep-fdg
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Related works:
Working Paper: Goldilocks: American precious metals and the Rise of the West (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20220063

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