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The Opportunity of a Disaster: The Economic Impact of the 1755 Lisbon Earthquake

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  • Pereira, Alvaro S.

Abstract

By combining new archival and existing data, this article provides estimates of the economic impact of the 1755 Lisbon earthquake, the largest natural catastrophe ever recorded in Europe. The direct cost of the earthquake is estimated to be between 32 and 48 percent of the Portuguese GDP. In spite of strict controls, prices and wages remained volatile in the years after the tragedy. The recovery from the earthquake also led to a rise in the wage premium of construction workers. More significantly, the earthquake became an opportunity to reform the economy and to reduce the economic semi-dependency vis-à -vis Britain. “ Sometimes miracles are necessary, natural phenomena, or great disasters in order to shake, to awaken, and to open the eyes of misled nations about their interests, [nations] oppressed by others that simulate friendship, and reciprocal interest. Portugal needed the earthquake to open her eyes, and to little by little escape from slavery and total ruin.†1

Suggested Citation

  • Pereira, Alvaro S., 2009. "The Opportunity of a Disaster: The Economic Impact of the 1755 Lisbon Earthquake," The Journal of Economic History, Cambridge University Press, vol. 69(2), pages 466-499, June.
    • Handle: RePEc:cup:jechis:v:69:y:2009:i:02:p:466-499_00
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    Cited by:

    1. Okazaki, Tetsuji & Okubo, Toshihiro & Strobl, Eric, 2019. "Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923," The Journal of Economic History, Cambridge University Press, vol. 79(1), pages 1-31, March.
    2. Altindag, Duha T., 2012. "Crime and unemployment: Evidence from Europe," International Review of Law and Economics, Elsevier, vol. 32(1), pages 145-157.
    3. Bas van Bavel & Daniel Curtis, 2015. "Better understanding disasters by better using history: Systematically using the historical record as one way to advance research into disasters," Working Papers 0068, Utrecht University, Centre for Global Economic History.
    4. Palma, Nuno & Santiago Caballero, Carlos, 2019. "Patterns of Iberian economic growth in the early modern period," IFCS - Working Papers in Economic History.WH 29185, Universidad Carlos III de Madrid. Instituto Figuerola.
    5. Stefania Servalli & Massimo Sargiacomo, 2021. "Natural disasters and accounting: Which contributions form the past?," CONTABILIT? E CULTURA AZIENDALE, FrancoAngeli Editore, vol. 0(1), pages 5-9.
    6. Edward L Glaeser, 2022. "Urban resilience," Urban Studies, Urban Studies Journal Limited, vol. 59(1), pages 3-35, January.
    7. Toshihiro Okubo & Eric Strobl, 2021. "Natural disasters, firm survival, and growth: Evidence from the Ise Bay Typhoon, Japan," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 944-970, November.
    8. Zhou, Ziqiao & Zhang, Lin, 2021. "Destructive destruction or creative destruction? Unraveling the effects of tropical cyclones on economic growth," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 380-393.
    9. Edward L. Glaeser, 2021. "Urban Resilience," NBER Working Papers 29261, National Bureau of Economic Research, Inc.
    10. Shakya, Shishir & Basnet, Subuna & Paudel, Jayash, 2022. "Natural disasters and labor migration: Evidence from Nepal’s earthquake," World Development, Elsevier, vol. 151(C).
    11. Kota Ogasawara, 2022. "Persistence of natural disasters on children's health: Evidence from the Great Kantō Earthquake of 1923," Economic History Review, Economic History Society, vol. 75(4), pages 1054-1082, November.
    12. International Monetary Fund, 2014. "Portugal: Fiscal Transparency Evaluation," IMF Staff Country Reports 2014/306, International Monetary Fund.
    13. Jorge Hugo Barrientos-Marín & Sebastian Ospina-Valencia & Sebastian Giraldo, 2020. "The economic cost of natural disasters the case of the tsunami and nuclear emergency in Japan in 2011," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 93, pages 225-260, Julio-Dic.
    14. Leonor Freire Costa, & M. Manuela Rocha, & Paulo Brito, 2014. "Money Supply and the Credit Market in Early Modern Economies: The Case of Eighteenth-Century Lisbon," Working Papers GHES - Office of Economic and Social History 2014/52, ISEG - Lisbon School of Economics and Management, GHES - Social and Economic History Research Unit, Universidade de Lisboa.
    15. Hunter, Janet & Ogasawara, Kota, 2016. "Price shocks in disaster: the Great Kantō Earthquake in Japan,1923," Economic History Working Papers 68618, London School of Economics and Political Science, Department of Economic History.
    16. Spitzer, Yannay & Tortorici, Gaspare & Zimran, Ariell, 2020. "International Migration Responses to Natural Disasters: Evidence from Modern Europe’s Deadliest Earthquake," CEPR Discussion Papers 15008, C.E.P.R. Discussion Papers.
    17. Leonor Freire Costa & Maria Manuela Rocha & Paulo B. Brito, 2018. "The alchemy of gold: interest rates, money stock, and credit in eighteenth‐century Lisbon," Economic History Review, Economic History Society, vol. 71(4), pages 1147-1172, November.
    18. Yannay Spitzer & Gaspare Tortorici & Ariell Zimran, 2020. "International Migration Responses to Modern Europe’s Most Destructive Earthquake: Messina and Reggio Calabria, 1908," NBER Working Papers 27506, National Bureau of Economic Research, Inc.

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