Between 1520 and 1650, Spain’s economy suffered crippling and unrelenting inflation in the so-called Price Revolution. Most historians have attributed that inflation, in part, to the importation, starting in 1550, of silver from the Americas, which supposedly put much more currency into circulation in Spain. But in a report out this week, a team of researchers argues that for more than a century the Spanish did not use this imported silver to make coins, suggesting that the amount of money circulating in Spain did not increase and could not have triggered the inflation.
Between the 16th and 18th centuries, the Spanish extracted as much as 300 tons of silver per year from mines in Peru and Mexico. If the heavy bars managed to survive the hazards of the Atlantic, both natural and piratical, they could either be coined into pieces of eight or be traded with other countries to offset Spain’s many costs, which at this time included financing wars in the Netherlands and importing porcelain and silk from China. Read more.