Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247100 
Year of Publication: 
2019
Series/Report no.: 
EHES Working Paper No. 170
Publisher: 
European Historical Economics Society (EHES), s.l.
Abstract: 
We exploit a recurring natural experiment to identify the effects of money supply shocks: maritime disasters in the Spanish Empire (1531-1810) that resulted in the loss of substantial amounts of monetary silver. A one percentage point reduction in the money growth rate caused a 1.3% drop in real output that persisted for several years. The empirical evidence highlights nominal rigidities and credit frictions as the primary monetary transmission channels. Our model of the Spanish economy confirms that each of these two channels explain about half of the initial output response, with the credit channel accounting for much of its persistence.
Subjects: 
Monetary Shocks
Natural Experiment
Nominal Rigidity
Financial Accelerator
DSGE
Minimum-Distance Estimation
Local Projection
JEL: 
E43
E44
E52
N10
N13
Document Type: 
Working Paper

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