Jaime Reis

Market Integration in the Golden Periphery. The Lisbon/London Exchange, 1854-1891

Portugal was the first independent nation to follow Britain in joining the gold standard. Although beset by persistent current account deficits and heavily dependent on foreign capital inflows, it enjoyed a relatively stable tenure of 37 years on gold. This paper shows how it was possible to secure currency stability, despite a lower credibility for the peg and a higher incidence of gold point violations than in core countries. The explanation lies in the central role played by institutional actors, such as the Bank of Portugal and/or the government, whose interventions in the exchange market kept the parity within the band.

An 'Art', Not a 'Science'? Central Bank Management in Portugal Under the Gold Standard, 1863-87

As long as Portugal was on the gold standard, the Bank of Portugal, sought to stabilize the currency at the exchange rate to which the country was committed. Because it was subject to political and other constraints, the Bank carried out discount rate interventions excessively sparingly, although in accordance with what could be termed the contemporary ‘science’ of central banking. Consequently, it had to intervene constantly in the currency markets, usually in covert fashion, repeatedly infringing the gold standard’s ‘rules of the game’, in order to conciliate the needs of convertibility with a frequently unorthodox stance towards the gold standard.

Portuguese Living Standards, 1720–1980, in European Comparison: Heights, Income, and Human Capital

When and why did the Portuguese become the shortest Europeans? In order to find the answer to this question, we trace the trend in Portuguese living standards from the 1720s until recent times. We find that during the early nineteenth century average height in Portugal did not differ significantly from average height in most other European countries, but that when, around 1850, European anthropometric values began to climb sharply, Portugals did not. In a panel analysis of 12 countries, we find that delay in human‐capital formation was the chief factor hindering any improvement in the biological standard of living in Portugal.

International monetary systems in historical perspective

Acknowledgements - Notes on Contributors - Introduction J.Reis - The Classical Gold Standards Adjustment to Shocks: American Railroads and British Investment in the 1880s C.Knick Harley - Recent Developments in Bimetallic Theory S.E.Oppers - Was the Latin Monetary Union a Franc Zone? M.Flandreau - The Scandinavian Currency Union 1875-1914 I.Henriksen & N.Kaergard - Central Bank Co-operation in the Inter-War Period: A View from the Periphery M.de Cecco - The Origins of the Fixed Rate Dollar System A.Milward - France and the Bretton Woods International Monetary System 1960 to 1968 M.D.Bordo, D.Simard & E.N.White - Portugal and the Bretton Woods International System M.D.Bordo & F.T.Santos - A European Lender of Last Resort? Some Lessons from History F.H.Capie & G.E.Wood - Tales of Parallel Currencies: The Early Soviet Experience P.L.Siklos - The Role of Hegemonic Arrangements in the Evolution of the International Monetary System D.T.Llewellyn & J.R.Presley - Index

The Great Escape? The Contribution of the Empire to Portugal's Economic Growth, 1500-1800

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.

Human Capital and industrialization: The case of a Later Comer (Portugal, 1890)

This chapter touches on two inter-related debates in contemporary economic history concerning the role of human capital in economic growth. The first is the question of whether the early stages of the industrialization process were characterized essentially by a substitution of capital and unskilled labour, for skilled labour and therefore by a low degree of complementarity between technology (usually proxied in the literature by fixed capital) and human capital. The conventional view is that it was indeed a de-skilling process and that there was a high degree of substitutability between physical and human capital. The second debate arises from the consensus among growth economists that human capital is an important factor of growth in the long run and has been responsible for a good deal of convergence between economies (Abramovitz 1993). However, given the concurrent view about the limited importance of human capital in the Industrial Revolution, this has led many to accept the notion that this could not have happened during the nineteenth century but only during the twentieth century. Goldin and Katz (1998; 2000) and Goldin (2001) have tried to give substance to this argument with the claim that the reason for this secular transition has to do with the evolving nature of technology.

From convergence to divergence: Portuguese demography and economic growth, 1500-1850

We also thank colleagues on the Prices, Wages and Rents in Portugal 1300-1910 project. Finally, we thank FCT for financial support for this project.

Institutions and Economic Growth in the Atlantic Periphery: The Efficiency of the Portuguese Machinery of Justice, 1870–1910

The comparative economic performance of nations over the long run has been a major field of interest for some time now, both in Economic History and in Growth Economics. Thanks to the recent availability of macroeco-nomic data for many Western countries, its analysis has become possible using endogenous models which take into account the usual variables in the Solow formulation plus control variables, such as human capital, technology, or social capability. While recognizing the relevance of institutional factors, economic historians have appeared reluctant, however, to incorporate them formally into their equations.1 This is particularly evident in the abundant historical literature on the economics of growth and convergence during the so-called “first era of globalization” (Baumol, 1986; Bordo et al., 2003; O’Rourke and Williamson, 1997; 1999; Pamuk and Williamson, 2000).2 The classic work by O’Rourke and Williamson (1999), which quantifies in detail the causes of catch-up and convergence within the late nineteenth-century Atlantic economy, dismisses institutional influences on the grounds that open economy forces provide adequate explanation for the differential behavior of these economies. The assumption is that during the nineteenth century “the State took a broadly liberal policy stance” (p. 14) and institutional divergence among nations can therefore be treated as marginal to the problem under consideration.