Goldilocks: American Precious Metals and the Rise of the West

Yao Chen; Nuno Palma; Felix Ward

doi:10.1111/roiw.70045

Goldilocks: American Precious Metals and the Rise of the West

Yao Chen
, Nuno Palma
, Felix Ward^*

^*Corresponding author for this work

Economics

CEPR UK
Tinbergen Institute - TI
Centre for Economic Policy Research, London
University of Manchester

Research output: Contribution to journal › Article › Academic › peer-review

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Abstract

We estimate the contribution of the American precious metal windfall to Western Europe's growth performance in the early modern period. The exogenous nature of American precious metal extraction allows for the identification of monetary effects. We find that American precious metals fostered Western Europe's growth by stimulating trade and capital accumulation. Our findings place Western Europe's second-stage receivers in a particularly fortunate goldilocks zone that enjoyed monetary stimulus, while being insulated against the transport-loss induced financial crises that caused persistent damage to first-stage receiver Spain.

Original language	English
Article number	e70045
Journal	Review of income and wealth
Volume	72
Issue number	1
DOIs	https://doi.org/10.1111/roiw.70045
Publication status	Published - Feb 2026

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© 2026 The Author(s). Review of Income and Wealth published by John Wiley & Sons Ltd on behalf of International Association for Research in Income and Wealth.

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abstract = "We estimate the contribution of the American precious metal windfall to Western Europe's growth performance in the early modern period. The exogenous nature of American precious metal extraction allows for the identification of monetary effects. We find that American precious metals fostered Western Europe's growth by stimulating trade and capital accumulation. Our findings place Western Europe's second-stage receivers in a particularly fortunate goldilocks zone that enjoyed monetary stimulus, while being insulated against the transport-loss induced financial crises that caused persistent damage to first-stage receiver Spain.",

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Goldilocks: American Precious Metals and the Rise of the West

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