Editing Price revolution (section)

===Influx of gold and silver===
From an economic viewpoint the discovery of new [[silver]] and [[gold]] deposits as well as the [[productivity]] increase in the silver mining industry perpetuated the price revolution. When precious metals entered Spain, this influx drove up the Spanish price level and caused a balance of payments deficit. This deficit occurred on account of Spanish demand for foreign products exceeding exports to foreign markets.<ref name=PriceRev /> The deficit was financed by the metals that entered these foreign countries and in turn increased their money supply and drove up their price levels.<ref name=PriceRev />

The increased importation of [[commodity money|specie]] to Spain started in Central Europe around the beginning of the sixteenth century. According to Michael North (1994) central European silver output doubled between 1470 and 1520, and increased even more in the 1520s with the new mine of [[Jáchymov|Joachimsthal]].<ref name="North 1994" /> Also during this time the Spanish and Portuguese brought a large amount of gold from the New World to Europe. Starting in the 1540s a growing amount of silver was shipped to Europe from [[Zacatecas City|Zacatecas]], [[Guanajuato City|Guanajuato]] and [[Taxco]] mines in Mexico and the [[Potosí]] mountain in Peru.<ref name="North 1994"/> The production of the [[Cerro Rico|Potosí mine]] increased greatly in the 1560s after [[Mercury (element)|mercury]] deposits had been discovered in the Andes, as mercury was necessary to process the silver.<ref name="North 1994"/> Based on the records of Earl J. Hamilton (1934), the total imports of specie from the Americas during the 16th century amounted to around 210 million pesos, with 160 million of these pesos being imported in the second half of the 16th century.<ref name="Hamilton, Earl J. 1650">{{cite book |last=Hamilton |first=Earl J. |title=American treasure and the price revolution in Spain, 1501–1650 |publisher=New York: Octagon Books |date=1934}}</ref> The total amount of silver imported added up to about 3,915 metric tons of silver.<ref name="Hamilton, Earl J. 1650"/> However these numbers underestimate the total amount imported to Spain because Hamilton only counted imports recorded by the official [[Casa de Contratación]] in Seville, not including the specie shipped directly to [[Cadiz]] by the [[Dutch East India Company|Dutch]] and [[East India Company|British East India Companies]].<ref>Kindleberger, Charles Poor. ''Economic and Financial Crises and Transformations in Sixteenth-century Europe''. Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1998.</ref> The influx of these precious metals and the resulting money supply shocks help explain the price increase in Spain during the 16th century.{{Citation needed|date=March 2015}}