WORLD HISTORY

Detailed explanation-1: -Inflation in Spain had two main causes. First, Spain’s population had been growing. As more people demanded food and other goods, merchants were able to raise prices. Second, as silver bullion flooded the market, its value dropped.

Detailed explanation-2: -Spain’s European Union-harmonised 12-month inflation was 3.1%, down from 6.0% in February and below the 4.0% expected by analysts polled by Reuters.

Detailed explanation-3: -In the long run, gold and silver from the Americas hurt Spain’s economy. Inflation, or an increase in the supply of money compared to goods, led to higher prices. Monarchs and the wealthy spent their riches wastefully instead of building up Spain’s industries.

Detailed explanation-4: -Income convergence, higher wage growth, coupled with lower productivity growth than in the euro area, and the presence of non-competitive behaviour and market rigidities in some sectors seem to be the key elements behind persistently higher inflation in Spain.

Detailed explanation-5: -Between 1520 and 1650, Spain’s economy suffered crippling and unrelenting inflation in the so-called Price Revolution. Most historians have attributed that inflation, in part, to the importation, starting in 1550, of silver from the Americas, which supposedly put much more currency into circulation in Spain.