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The great escape? The contribution of the empire to Portugal’s economic growth, 1500-1800

Author

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  • Costa, Leonor Freire
  • Palma, Nuno
  • Reis, Jaime

Abstract

Newly assembled macroeconomic statistics for early modern Portugal reveal one of Europe’s most vigorous colonial traders and at the same time one of its least successful growth records. Using an estimated model in the spirit of Allen (2009) we conclude that intercontinental trade had a substantial and increasingly positive impact on economic growth. In the heyday of colonial expansion, eliminating the economic links to empire would have reduced Portugal’s per capita income by roughly a fifth. While the empire helped the domestic economy it was not sufficient to annul the tendency towards decline in relation to Europe’s advanced core which set in from the 17th century onwards. We conclude that the explanation for Portugal’s long-term backwardness must be sought primarily in domestic conditions

Suggested Citation

  • Costa, Leonor Freire & Palma, Nuno & Reis, Jaime, 2013. "The great escape? The contribution of the empire to Portugal’s economic growth, 1500-1800," IFCS - Working Papers in Economic History.WH wp13-07, Universidad Carlos III de Madrid. Instituto Figuerola.
  • Handle: RePEc:cte:whrepe:wp13-07
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    File URL: https://e-archivo.uc3m.es/bitstream/handle/10016/17891/wp1307.pdf?sequence=1
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    References listed on IDEAS

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    1. Ronald Findlay & Kevin H. O'Rourke, 2007. "Power and Plenty: Trade, War and the World Economy in the Second Millennium (Preface)," Trinity Economics Papers tep0107, Trinity College Dublin, Department of Economics.
    2. Allen, Robert C. & Murphy, Tommy E. & Schneider, Eric B., 2012. "The Colonial Origins of the Divergence in the Americas: A Labor Market Approach," The Journal of Economic History, Cambridge University Press, vol. 72(04), pages 863-894, December.
    3. De Long, J Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 671-702, October.
    4. Guillaume Daudin, 2006. "Profits du commerce intercontinental et croissance dans la France du xviiie siècle," Revue économique, Presses de Sciences-Po, vol. 57(3), pages 605-613.
    5. Allen,Robert C., 2009. "The British Industrial Revolution in Global Perspective," Cambridge Books, Cambridge University Press, number 9780521868273, March.
    6. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    7. Rei, Claudia, 2011. "The organization of Eastern merchant empires," Explorations in Economic History, Elsevier, vol. 48(1), pages 116-135, January.
    8. Patrick O'Brien, 1982. "European Economic Development: The Contribution of the Periphery," Economic History Review, Economic History Society, vol. 35(1), pages 1-18, February.
    9. repec:spo:wpecon:info:hdl:2441/684 is not listed on IDEAS
    10. Robert C. Allen, 2003. "Progress and poverty in early modern Europe," Economic History Review, Economic History Society, vol. 56(3), pages 403-443, August.
    11. Timmer,Marcel P. & Inklaar,Robert & O'Mahony,Mary & Ark,Bart van, 2013. "Economic Growth in Europe," Cambridge Books, Cambridge University Press, number 9781107412446, April.
    12. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
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    Citations

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    Cited by:

    1. Amavilah, Voxi Heinrich, 2017. "The African origins of Euro-American development: Pins on an empirical roadmap," MPRA Paper 79925, University Library of Munich, Germany.
    2. Nuno Palma, 2016. "Sailing away from Malthus: intercontinental trade and European economic growth, 1500–1800," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 10(2), pages 129-149, may.
    3. Lains, Pedro, 2016. "Agriculture and Economic Development on the European Frontier : Portugal, 1000-2000," IFCS - Working Papers in Economic History.WH 23463, Universidad Carlos III de Madrid. Instituto Figuerola.
    4. Jaime Reis, 2016. "The Gross Agricultural Output of Portugal: A Quantitative, Unified Perspective, 1500-1850," Working Papers 0098, European Historical Economics Society (EHES).

    More about this item

    Keywords

    The European Little Divergence;

    JEL classification:

    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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