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

Abstract: Spain was one of the world's richest countries around 1500. Two centuries later it was a backwater. We rely on a synthetic control methodology to 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 increased by up to 200% by the mid-seventeenth century. Spain's GDP per capita outperformed other European nations for around a century, but by 1750, GDP per capita was around 40% lower than it would have been if Spain had not been the first-stage 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)
Date: 2022-01, Revised 2025-10
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Forthcoming in European Economic Review.

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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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