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The Cross of Gold: Brazilian Treasure and the Decline of Portugal

Author

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  • Kedrosky, Davis
  • Palma, Nuno

Abstract

As late as 1750, Portugal had a high output per head by Western European standards. Yet just a century later, Portugal was this region’s poorest country. In this paper, we show that the discovery of massive quantities of gold in Brazil over the eighteenth century played a key role in the long-run development of Portugal. The country suffered from an economic and political resource curse. A counterfactual based on synthetic control methods suggests that by 1800 Portugal’s GDP per capita was 40 percent lower than it would have been without its endowment of Brazilian gold.

Suggested Citation

  • Kedrosky, Davis & Palma, Nuno, 2025. "The Cross of Gold: Brazilian Treasure and the Decline of Portugal," The Journal of Economic History, Cambridge University Press, vol. 85(3), pages 730-766, September.
    • Handle: RePEc:cup:jechis:v:85:y:2025:i:3:p:730-766_4
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    Cited by:

    1. Charotti, Carlos Javier & Palma, Nuno & dos Santos, Joao Pereira, 2022. "American treasure and the decline of Spain," CEPR Discussion Papers 17020, C.E.P.R. Discussion Papers.
    2. Yao Chen & Nuno Palma & Felix Ward, 2022. "Goldilocks: American precious metals and the Rise of the West," Tinbergen Institute Discussion Papers 22-063/VI, Tinbergen Institute, revised 01 Jul 2024.
    3. repec:tin:wpaper:220063 is not listed on IDEAS
    4. Leonor Freire Costa & António Henriques & Nuno Palma, 2022. "Anatomy of a Premodern State," Economics Discussion Paper Series 2208, Economics, The University of Manchester, revised May 2024.
    5. Palma, Nuno & Reis, Jaime & Rodrigues, Lisbeth, 2023. "Historical gender discrimination does not explain comparative Western European development: evidence from Portugal, 1300-1900," Explorations in Economic History, Elsevier, vol. 88(C).

    More about this item

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • N53 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: Pre-1913
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913

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