The price revolution was a period of rapid inflation that occurred in Europe between the 15th and 17th centuries. Over the course of 150 years, prices for commodities increased sixfold and in some cases, the inflation was even more extreme. A number of theories have been put forward to explain the origins of the price revolution and the topic is briskly debated among historians who specialize in this period.
One of the oldest explanations is that the supply of precious metals boomed due to increased exploitation of European silver deposits, as well as an influx of gold and silver from the Americas. This theory argues that the increased availability of metals created a situation where numerous people had large amounts of money and drove prices up by being willing to pay a premium for some goods. However, some critics of this theory have argued that the dates of the price revolution do not quite match up with the dates when precious metals began flooding European markets.
Population pressures have also been cited as a cause. The European population increased during this period as people bounced back from the Black Death, and this would have led to increased competition for products and services. The cost of living may have risen in response, contributing to the development of rapid inflation. As inflation persisted, the standard of living would have fallen for many Europeans, but those who could pay higher prices would have sustained the market.
Other historians have theorized that demographic changes may have been involved. This period marked a shift from heavily agrarian life to increasingly large towns and cities. As people moved out of farmland, fewer crops were produced. When supply of a commodity falls and demand remains the same, high prices can result as people compete on the open market. The price revolution also occurred during a time when the practice of maintaining common lands for public benefit was beginning to decline and people were not as able to meet their own needs with common grazing and farming areas, instead being forced to pay rents to access land for farming.
As historians study the price revolution, new theories to explain it periodically emerge. The integration of economics models into historical analysis has provided particularly valuable insight into the origins of this period of runaway inflation. As with other historical events, it is probable that a unique combination of factors, rather than any single cause, was involved in the development of the price revolution and the radical social changes that accompanied it.
