What were two main causes of Spanish inflation?
Income convergence, higher wage growth, coupled with lower productivity growth than in the euro area, and the presence of non- competitive behaviour and market rigidities in some sectors seem to be the key elements behind persistently higher inflation in Spain.
What are the effects of the gold and silver coming from its vast empire made Spain incredibly wealthy?
Cause: The gold and silver coming from its vast empire made made Spain incredibly wealthy. Effect? Effect: Spain built a powerful army and navy, and its monarchs and nobles became patrons of artists, leading to a golden age in arts. Effect: Spain Suffered from severe inflation.
What was the biggest contributing factor to Spain’s Golden Age?
Why is the period from 1550 to 1650 considered Spain’s golden age? The period of time from 1550 to 1650 is considered the Spanish Golden Age because of it’s brilliance in it’s arts and literature.
How did the influx of Spanish silver affect the European economy?
Influx of silver and getting rid of Jews and Muslims and demand for products causes a massive inflation in economy of Spain. The country was rich but wasn’t producing anything because of their low manufacturing class and large demands for goods. This caused Spain’s economy to collapse.
Why was silver so important to European merchants?
Hence silver became of high value because it was a valid currency that could be processed abroad. The bimetallic ratio of silver to gold was about two to one, which meant that European and Japanese merchants made a large amount of profit.
Why was the discovery of silver in Spanish America so important to the course of world history?
American silver proved crucial in providing the Spanish imperial state with the fiscal base necessary to build and defend its overseas empire, while also sparking keen interest in American exploration and colonization by Spain’s European rivals.
What were the economic effects of the silver trade?
Cause: As the population grew, people demanded more food and other goods, so merchants were able to raise prices. As silver bullion flooded the market, its value dropped and it took more to buy anything. Effect: The Spanish economy declined and at times it was bankrupt.
What caused the global flow of silver?
Good!: “The increased flow of silver during the mid-16th century to the early 18th century caused social and economic effects in all regions connected with the trade by increasing integration of Europeans in the globalization of world trade and creating greater economic opportunities but also growing social divisions …
What is an economic effect of the global flow of silver?
One negative economic effect caused by the global flow of silver was inflation. This was especially true in Spain which had an overabundance of silver. A Spanish scholar at the time, Tomas de Mercado, observed that “high prices ruined Spain” caused by the trade for Asian goods with Spanish silver.
How did high prices ruin Spain?
“High prices ruined Spain as the prices attracted Asian commodities and the silver currency flowed out to pay for them. The streets of Manila in the Spanish territories of the Philippines could be paved with granite cobblestone brought from China as ballast in Chinese ships coming to get silver for China”.
Why would mercadeo be concerned about high prices ruining Spain?
The most unforeseen effects of the silver trade, were the unintended economic consequences silver produced. In Spain, they had so much silver that it caused rampant inflation. Tomas de Mercado, a scholar, spoke of the high prices ruining Spain (Doc 2). The lack of silver in their economy was causing prices to plummet.
What were contributing to driving the silver trade from 1550 to 1800?
The major factors that contributed to the global silver trade between 1550 and 1800 were competition for power, increasing demand for Asian goods, and prevalence of currency.
Why did Silver ruin Spain?
In Document 1, a Spanish scholar writes, “High prices ruined Spain as the prices attracted Asian commodities and the silver currency flowed out to pay for them.” As the price of silver decreased, the Spanish had to send more and more silver over to China to get the goods they desired.