Editing Price revolution (section)

==Background==
Most historians look at the end of the [[Renaissance]] as the start of the Price Revolution. An era that was 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).<ref name=Munro>{{cite journal|last=Munro |first=John |year=2008 |title=Money, Prices, Wages, and 'Profit Inflation' in Spain, the Southern Netherlands, and England during the Price Revolution era: ca. 1520 - ca. 1650 |journal=História e Economia Revista Interdisciplina |publisher=University of Toronto |pages=12–71}}</ref> Additionally, Europe experienced technological advancement in the mining industry, the stream of currency through [[debasement]] from royals, and the emergence of [[Protestantism]].<ref name=Munro/>

The [[Great Bullion Famine|severe shortage]] of [[precious metal]]s 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. This influx caused a relative decrease in the value of these metals in comparison with agricultural and craft products.<ref name=EuroHistory /> Furthermore, depopulation – specifically in southern Spain – resulted in a high rate of inflation.<ref name=EuroHistory /> The failure of the Spanish to control the influx of gold and the price fluctuations of gold and silver from the American mines, combined with war expenditures, led to three bankruptcies of the Spanish monarchy by the end of the 16th century.<ref name=EuroHistory />

In the 16th century, prices increased consistently throughout Western Europe, and by the end of the century prices reached levels three to four times higher than at the beginning. The annual inflation rate ranged from 1% to 1.5%.<ref name=PriceRev16 /> Since the monetary system of the 16th century was based on [[Commodity money|specie]] (mostly silver) this inflation rate was significant. The specie-centered monetary organization had its own price-level stabilization property: rising commodity prices led to a fall in the purchasing power of the monetary metals, and therefore less incentive to mine them and more incentive to use them for non-monetary purposes. This stabilizing adjustment of the money supply led to long-run stability of price levels regardless of permanent shifts in money demand over time. Therefore, the long-run inflation can only be explained either by the devaluation of coins or by shifts in the supply of the specie. An increase in the productivity of mining in Peru led to a fall in the price of metals relative to rising prices for other commodities in Europe. This process is only remedied if the [[purchasing power]] of the metal is equal to its production costs.<ref name=PriceRev16 />