The aim of this paper is twofold. First, to obtain inflation rates for the four regions of Spain analyzed for the period 1501 to 1800 by modeling Hamilton's (1934Hamilton's ( , 1947 price index series by means of an unobserved component model with a common cyclical factor. And second, to prove their long term convergence process. Therefore convergence concerns both the cyclical variation of inflation rates common to the four regions, and trend inflation. A complete convergence of the trend inflation occurred once the monetary reforms of Charles II of Spain were introduced in order to redress the previous monetary instability known as inflation of the vellón. The predominance of the vellón in small change and the concentration of the influx of silver when inflation was comparatively lower (second half of the sixteenth century and the seventeenth century) complicate to reach simple conclusions on the monetary origin of inflation exclusively based on precious metals, but, on the contrary, suggests a monetary origin based on copper coin and fiscal distortions. So, monetary stability proved to be a necessary condition for inflation convergence and the fulfillment of the purchasing power parity condition along the eighteen century.

PurposeUsing data from 1820 onwards in a group of seven countries, namely, Australia, Chile, Denmark, France, the UK, Italy and the USA, the authors investigate if there is a long-run equilibrium relationship between the two variables (GDP and population).Design/methodology/approachUsing fractional integration and cointegration methods, this paper deals with the analysis of the relationship between GDP and population using historical data.FindingsThe authors’ results show first that the two series are highly persistent, presenting orders of integration close to or above 1 in practically all cases. Testing cointegration between the two variables, the results are quite variable depending on the methodology and the bandwidth numbers used, but if cointegration takes places, it only occurs in the cases of France, Italy and the UK.Research limitations/implicationsThe fact that the orders of integration of all series is close to 1 indicate high levels of persistence with shocks having permanent effects and requiring strong measures to recover the original trends.Practical implicationsAny shock affecting the series will have a permanent nature, persisting forever.Originality/valueUpdated time series techniques based on concepts such as fractional integration and cointegration are used.

RESUMENLas dificultades financieras que aquejaron a Castilla en la segunda mitad del siglo XVI obligaron a buscar nuevos recursos financieros. Las alteraciones monetarias de las piezas de vellón fueron la alternativa elegida. A lo largo del siglo XVII se promulgaron más de veinticinco leyes alterando, en un sentido o en otro, los valores monetarios de la calderilla. Estas alteraciones no dejaron indiferente al sistema monetario y, aparte de la inestabilidad y de los correspondientes efectos sobre los precios, generaron infinitud de protestas y reacciones en contra. El Gobierno, consciente de la gravedad del asunto, llevó a cabo varios intentos de remediar la situación, medidas que sólo triunfaron cuando desapareció el problema fiscal de fondo. Asistimos, por tanto, en este siglo a un esquema de coordinación entre política monetaria y política fiscal en el que la política monetaria hubo de financiar el déficit en el que había incurrido la autoridad fiscal. 330 ABSTRACTThe financial struggles that Castilla underwent during the second half of the 16 th century forced the Crown to look for new ways of funding. The monetary changes encompassed the use of copper coins known as piezas de vellón. Throughout the 17 th century, there were 25 laws decreed altering in one way or the other the monetary value of the coins. These adjustments did not go unnoticed, having a direct impact on the monetary system creating instability and dramatic price fluctuations, on top of countless protests and rejections. The Government, conscious of the severity of the situation, made several attempts to resolve the imbalances, which only triumphed once the underlying fiscal problems disappeared. We see in this century co-ordination between monetary and fiscal policy in which monetary policy had to finance the deficit incurred by the fiscal authorities.

La presente investigación analiza la respuesta teórica que recibió uno de los factores causantes de la denominada Revolución de los precios en Europa durante los siglos XVI y XVII, concretamente el aspecto relacionado con las alteraciones de los valores monetarios de las piezas de vellón y plata en Castilla e Inglaterra. En ambos países estos episodios fueron analizados con rigor desde el punto de vista teórico tal y como se desprende del estudio de las ideas monetarias del periodo que se desarrollaron en los dos territorios. En este estudio, a la luz de los acontecimientos históricos que tuvieron lugar, analizamos los fundamentos del pensamiento monetario de Juan de Mariana y de John Locke quienes se oponen a que el soberano altere los valores monetarios con intereses fiscales, así como la diferente acogida que tuvieron.

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