By the sixteenth century, the center of European commerce was rapidly migrating north, and for a time the Fugger family in Germany controlled more wealth than all of the Italian merchant families combined. This was a time of great economic innovation in Germany and the Netherlands, and the Fuggers may be understood as an early incarnation of venture capitalists.

According to the economic theory of mercantilism, a nation’s wealth is measured by how much precious metal (gold and silver) it has accumulated and stored. The entire purpose of maintaining a favorable balance of trade was to ensure that more gold and silver was coming into the country than was leaving.

Mercantilism was the prevailing economic theory in Europe throughout the Renaissance period and the first wave of European expansion and colonization. It did eventually fall out of favor during the eighteenth century, at which point it was replaced by capitalism. The writings of Adam Smith inThe Wealth of Nationsprovided the philosophical and intellectual impetus behind the transition between these two economic systems. Smith argued that competition and limited government intervention would inspire economic growth and venture of an unprecedented nature.

Around 1450, European commerce was primarily concentrated in the Italian city-states. Cities like Florence, Milan, Naples, Venice, and Rome all profited from their position on the Mediterranean that allowed them to facilitate trade between the Near East and the rest of Europe. Eventually the center of commerce would migrate to the Iberian Peninsula before quickly shifting north to the Netherlands and England.

我nflation generally occurs when there is too much money flooded into a society without a proportional increase in the level of production. In sixteenth-century Europe, almost all currency was backed by gold, silver, or some other precious metal, so when gold and silver flooded into Europe from the New World, it led to rampant inflation until the money could be reinvested into increasing the level of production.

Adam Smith’sWealth of Nationsintroduced many of the thinkers and rulers of Europe to the idea that the economy is governed by a set of natural laws that would naturally inspire efficiency and competition. Furthermore, Smith contends that government intervention only impedes this process. The idea that the economy is subject to natural laws underpins much of the theory behind free market capitalism.

The middle class were certainly the primary beneficiaries of the inflationary economy of this time period. The situation for the rural peasants and the clergy remained largely unchanged, while a small number of the urban working class might have been elevated to the middle class. However, for the nobility, the inflationary economy was a huge hindrance, particularly if the wealth of the noble family was based exclusively on land ownership.

A "bourse" was the name commonly given to a stock exchange in the French speaking world, particularly in the Early Modern period.

The invention of the steam engine by Thomas Newcomen, and its later improvement by James Watt, led to and accelerated the industrial revolution. It also led to the construction of railroads in the first half of the nineteenth century, particularly in Britain. This lowered the cost and time required for shipping and allowed new types of goods to be effectively transported and sold.

The Triangular Trade Route is the name used to describe the transfer of products, resources, and humans from one continent to another during the colonial era. Generally, it involved the forced transfer of slaves from Africa to the Americas; the transportation of raw resources from the Americas to Europe; and the opening up of Africa and the Americas as a market for manufactured goods from Europe. It also introduced alcohol to millions of indigenous people for the first time, which would have profound sociological effects for centuries to come.