American bullion also weakened manufacturing in Spain, by inflating the prices of Spanish-made goods. This encouraged cheaper imports from the rest of Europe while rendering Spanish manufactures too expensive to compete in export markets. The Spanish loss benefited manufacturers elsewhere in Europe, especially the Dutch, who increased their exports to Spain. Offering little attraction to investors, Spanish manufacturing lagged behind the rest of western Europe in quantity, quality, and technological innovation. That lag would, in turn, greatly weaken the Spanish empire in the Americas, as
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