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.
Henriques, A. (2020, March 1). Capital in a frontier economy: Portugal, 1230-1500. Revista de Historia Economica - Journal of Iberian and Latin American Economic History. Cambridge University Press. https://doi.org/10.1017/S0212610919000326