In Table 3, we provided data on the annual outflow of bullion from Europe, so as to obtain an estimate of the annual net inflow of bullion into Europe. Some of these bullion exports from Europe went to the Baltic, but the majority went to Asia via the English East India Company (EIC) or the Dutch Verenigde Oostindische Compagnie (VOC). These flows are shown in Table 5, along with a rough estimate of further bullion exports from Europe via the Levant, most of which also ended up in Asia (Chaudhuri, 1978). To these flows of bullion into Asia must be added direct shipments from the Americas to the Philippines (Barrett, 1990).
For most of the period 1600-1800, the annual inflow of bullion into Asia was roughly half the net inflow into Europe. Since the population of Asia was between three and four times the population of Europe between 1500 and 1820, this added up to a considerably smaller per capita bullion inflow into Asia than into Europe (Maddison, 2001: 241). Any analysis based upon the Fisherian quantity theory of money and the price-specie-flow mechanism, then, would have to predict a smaller increase in Asian than in European prices. On this analysis, we would expect the price revolution in Asia to be a more modest affair than in Europe, and this is consistent with the greater controversy over the applicability of the term to Asian experience.
However, using the Cambridge equation, if the stock of money was initially smaller in Asia, a relatively small bullion inflow could lead to a large proportional change in the money stock. Furthermore, an analysis based upon the monetary approach to the balance of payments, would predict an increase in the price of traded goods in Asia similar to that in Europe. One further point to bear in mind when assessing the applicability of the price revolution to Asia is that it has long been common practice to convert European prices into silver prices throughout the early modern period. But as Flynn (1984: 409) notes, this is not always the case in Asia, where inflation in silver prices may be masked by changes in the relative price of other metals used as money.
This brings us to a further important point. Although we have discussed bullion flows in terms of silver equivalent, lumping together gold as well as silver, it should be noted that inflows to Asia were largely in the form of silver, since there were periods when the relative price of silver was substantially higher in Asia than in Europe (Flynn, 1986). This has been explained by an increase in the Asian demand for silver as a result of the conversion of the Chinese monetary and taxation systems to silver (Flynn and Giráldez, 1995; von Glahn, 1996). Such problems of disequilibrium are common in bimetallic monetary systems, and can exist over quite long periods when bullion flows are small relative to stocks (Flynn, 1986: 49).