The impact of the Commercial Revolution on the world economy has contributed to the expansion of trade borders, the creation of a single currency for accounting, and the development of international entrepreneurship.
Explanation:
The definition of a commercial revolution can be attributed to the period of economic expansion of Europe. The period of the European economic growth, colonialism, and mercantilism, which lasted from about the 16th to the beginning of the 18th century, defines the Commercial Revolution characteristics, followed by the Industrial Revolution.
Starting from the Crusades, Europeans rediscovered spices, silk, and other commodities being rare in Europe, and the trade expanded in the second half of the Middle Ages. Seeing the competing national interest, Europeans had a desire to increase world power through their colonial empires. The Commercial Revolution is marked by an increase in overall trade and growth in financial services such as banking, insurance, and investment.
An essential consequence of the Commercial Revolution effect was the Columbus Exchange. In the 18th century, the Mediterranean Sea was the center of European trade with other parts of the world for over 2000 years. After 1492, this emphasis shifted to the Atlantic Ocean with routes southward around the Cape of Good Hope and transatlantic trade. Another meaningful change was the population growth due to better food and more wealth, larger families, and the migration of peoples from Europe to America. Population growth has provided the expanding labor force required for industrialization. A significant result of the commercial revolution of Europe was the total stock of all tangible wealth needed for the subsequent industrial revolution. Economic prosperity funded new forms of cultural expression during this period.
Mercantilism is a natural movement of the period of the commercial revolution in Europe. Mercantilism is an economic policy that emphasizes that the goal of each country was to get as much money as possible by any means. The belief was that more fertile land is a stronger state. Monopolistic enterprises regulated trade in cities, controlling the production of goods. The adopted systems prevented external merchants from selling products in the town and forced third-party merchants to pay losses and other types of payments for the privilege of doing business in a city. Supporters of mercantilism were Thomas Moon, Philip von Hernigk, and others.
The following Commercial Revolution facts have been revealed when doing the research. The silver coinage need also influenced the desire for expanded land exploration, as silver and gold were spent to trade with the Middle and the Far East; Europeans had a constant shortage of precious coins. European mines for the extraction of silver ore and gold were exhausted. The metal was too deep to reach as the water filled the tunnel, and the technologies were not advanced enough to successfully remove the water to reach the ore or gold.
The second fact is that trade for several years of the Commercial Revolution prospered not because of research for the extraction of precious metals, but due to a new belief in gold coinage. Italian city-states such as Genoa and Florence (where the first gold coins began to be minted in 1252) and kingdoms such as the Kingdom of Sicily usually received gold through trading partners like Tunisia and Senegal (Fig.1). The new, stable, and universally accepted coinage, which was compatible with traditional European coinage systems, identified the increasing demand for foreign currency to facilitate trade. It is possible to note that this system made an international business more profitable. Thus, the commercial revolution in Europe had a considerable impact on the global economy. The expansion of territorial borders of the trade, the development of new lands, and the acceptance of a single currency contributed to the allocation of the 13th -18th century period as a separate era of commercialization.