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Title: Reconstruction of the Spanish money supply, 1492-1810

Author(s): Yao Chen, Nuno Pedro G. Palma and Felix Ward

Publication Date: December 2020

Keyword(s): Early Modern Period, equation of exchange and Quantity Theory of Money

Programme Area(s): Economic History, Macroeconomics and Growth and Monetary Economics and Fluctuations

Abstract: How did the Spanish money supply evolve in the aftermath of the discovery of large amounts of precious metals in Spanish America? We synthesize the available data on the mining of monetary metals and their international flow to estimate the money supply for Spain from 1492 to 1810. Our estimate suggests that the Spanish money supply increased more than ten-fold. This monetary expansion can account for most of the price level rise in early modern Spain. In its absence, Spain would have required substantial deflation to accommodate its early modern output gains.

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Bibliographic Reference

Chen, Y, Palma, N and Ward, F. 2020. 'Reconstruction of the Spanish money supply, 1492-1810'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=15509