Accounting for the Reversal of Fortune: Spain and Britain, 1501-1800

Leandro Prados de la Escosura

No 21503, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Spain's per capita income grew steadily through the sixteenth and eighteenth centuries, though it declined from 1570-1650, shaping Spain’s Reversal of Fortune, as confirmed by per capita GDP series for Spain and Britain expressed in PPP-adjusted £1790s. Labour productivity, the main driver of per capita GDP, grew in Spain due to factor intensity, but efficiency losses underpinned stagnation or decline. Spain's levels fell from similar to less than half of Britain's by 1800. Phases of TFP decline in Spain coincided with rising TFP in Britain. Efficiency explains the labour productivity growth differential. Ingenuity drove the Reversal of Fortune.

Keywords: Reversal of fortune; Efficiency; Dual TFP; Early modern spain; Britain (search for similar items in EconPapers)
JEL-codes: E24 J24 N13 O47 (search for similar items in EconPapers)
Date: 2026-05
New Economics Papers: this item is included in nep-eff, nep-gro, nep-his and nep-lma
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Working Paper: Accounting for the Reversal of Fortune: Spain and Britain, 1501-1800 (2026)
Working Paper: Accounting for the Reversal of Fortune: Spain and Britain, 1501--1800 (2026)
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