Effects of the New Global Economy

The new global flow of goods and profits produced some significant benefits. The flow of wealth into Europe helped to expand the middle class and provided the capital that would lead to the Industrial Revolution. However, the huge amounts of gold and silver flowing into Spain and China from the Americas also produced negative economic effects. In particular, the increase in the quantity of money in circulation caused inflation.

As a result of the activities of European merchants, regional markets in Europe, Africa, and Asia continued to prosper. Funding for the arts increased as merchants and governments used their rising profits and revenue to sponsor artists and authors. Some rulers used their sponsorship of the arts to produce art and architecture that helped to legitimize their rule. Other art symbolized the growing importance of global trade.