CAPITAL IN A FRONTIER ECONOMY: PORTUGAL, 1230–1500

António Henriques

Revista de Historia Económica / Journal of Iberian and Latin American Economic History, 2020, vol. 38, issue 1, 11-44

Abstract: In this paper we show that Portugal benefitted from comparatively low-interest rates from the 13th century onwards, well before the generalised drop in interest rates in Europe. Contrary to the thesis that frontier economies struggle with high-interest rates and scarcity of capital, we find that the country's low and stable interest rates can be explained by its wide availability of land, combined with monetary stability and a favourable institutional network. These conclusions are built upon an entirely new dataset of interest rates and returns on capital for Portugal in the period 1230–1500.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:cup:reveco:v:38:y:2020:i:1:p:11-44_3

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