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

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  • ALVARO S. PEREIRA

Abstract

By combining new archival and existing data, this paper provides estimates of the economic impact of the 1755 Lisbon earthquake, the largest ever-recorded natural catastrophe 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 earthquake also led to a rise in the wage premium of construction workers. More significantly, the earthquake became an opportunity for economic reform and to reduce the economic semi-dependency vis-à-vis Britain.

Suggested Citation

  • Alvaro S. Pereira, 2006. "The Opportunity of a Disaster: The Economic Impact of the 1755 Lisbon Earthquake," Centre for Historical Economics and Related Research at York (CHERRY) Discussion Papers 06/03, CHERRY, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:cherry:06/03
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    References listed on IDEAS

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    1. Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
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    Keywords

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    JEL classification:

    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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