Price revolution

The Price Revolution, sometimes known as the Spanish Price Revolution, was a series of economic events that occurred between the second half of the 15th century and the first half of the 17th century, and most specifically linked to the high rate of inflation that occurred during this period across Western Europe. Prices rose on average roughly sixfold over 150 years. This level of inflation amounts to 1.2% per year compounded, a relatively low inflation rate for modern-day standards, but rather high given the monetary policy in place in the 16th century. Generally it is thought that this high inflation was caused by the large influx of gold and silver from the Spanish treasure fleet from the New World; including Mexico, Peru, Bolivia and the rest of the Spanish Empire. Specie flowed through Spain increasing its prices and those of allied European countries (e.g., the imperial territories of Charles V). Wealth then spread to the rest of Western Europe as a result of the Spanish balance of payments deficit, or was directly introduced to countries like Great Britain and France, using piracy to attack the Spanish fleet. This enlarged the monetary supply and price levels of many European countries. Most historians look at the end of the Renaissance as the start of the Price Revolution. An era often considered a time of peace for the Western European population, the Renaissance was a period when Western Europe experienced equilibrium in the price of commodities and labor. It also was a period when there was a high concentration of wealth in the hands of a few (the Black Death had wiped out nearly a third of the population a century before). Additionally, Europe experienced technological advancement in the mining industry, the stream of currency through debasement from royals, and the emergence of Protestantism. The severe shortage of precious metals during the late 15th and early 16th centuries eased in the second half of the 16th century. The Spanish mined American gold and silver at minimal cost and flooded the European market with an abundance of specie.