The Relation Between Silver And Economic Growth In The Ming Dynasty

It is a common sense that early Ming dynasty was in lack of silver. In late 16th century, silver from Japan and Southern America fluxed into China. At the same time, silver became legal currency. This was a significant in history of Chinese currency. Therefore, some researchers think that the silver influx mitigated the lack of silver in the Ming dynasty. In this way, silver played an important role in the Ming economic growth. Some researchers even have the idea that the decrease in silver influx into China coursed the end of the dynasty.The relationship of money quantity and economic growth is one of the core problems of macroeconomic theory. Quantity theory of money talked about the problem at the end of 19th century. Classical economic school which accepted quantity theory believed that there was no causal relation between economic growth and monetary supply in long run.Under such academic background, the adoption of economic logic into the understanding of silver and economic performance is of great significance. On one hand, economics provides strict logic to this problem. On the other hand, this helps us understand the development of Chinese economy. According to correlation analysis, this paper checked the correlation between silver and GDP growth. By ordinary least square procedure, this paper explored the influence of population and field on economic growth in the Ming dynasty. The conclusion is:1. Silver did not exert apparent effort on economic performance during the Ming dynasty. This paper use indexed GDP data and the samples are chosen in the span of a long period in the sum of 200 years. In the other word, there was no apparent relationship between silver and economic growth in long time.2. Population and field are the driving force to the Ming economy. In this dynasty, producing technology was in low level and the promotion relied greatly on input of factors.In conclusion, according to the analysis of silver and the Ming economic performance, this paper proves the traditional hypothesis of monetary economics:in the long time, there is no causal relation between silver and production growth.The Ming dynasty mentioned here is a period from 1402 to 1644, rather than the ruling group itself. This paper is aimed to talk about an economic phenomenon by economic theory, rather than political research.