American Treasure and the Decline of Spain
Carlos J. Charotti,
Nuno Palma and
João Pereira Dos Santos ()
Economics Discussion Paper Series from Economics, The University of Manchester
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 mid-seventeenth 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.
Keywords: Resource Curse; Dutch Disease; State Capture; Early Modern Spain; Augmented Synthetic Control (search for similar items in EconPapers)
JEL-codes: N13 O11 O57 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-his
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Working Paper: American treasure and the decline of Spain (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:man:sespap:2201
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