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International Growth and Technological Change.

Spanish and Portuguese colonies in the New World exported large quantities of silver and gold to Europe, some of which found its way Into the English money supply. There were multiple results that all helped expand and grow the English economy, according to Dr. Nuno Palma of the University of Manchester. The key features of the growth pattern included specialization and structural change, and increases in market participation. The new supply of specie (silver and gold) increased the money supply. Instead of promissory notes paid off by future promissory notes, business transactions were supported by hard specie. This reduced transaction costs, increased the coverage of the market, and opened incentives and opportunities to participate in cash transaction. Demand arose for luxury goods from Asia, such as silk and pepper, which created new upscale market demands. . The increased supply of specie made tax collection easier, allowing the government to build up fiscal capacity and provide for public goods. [9]

Various inflationary pressures existed; some were due to an influx of New World gold and a rising population. Inflation had a negative effect on the real wealth of most families.[10] It set the stage for social upheaval with the gap between the rich and poor widening. This was a period of significant change for the majority of the rural population, with manorial lords beginning the process of enclosure