Between 1500 and 1800, Iberian society was characterized by high inequality of income and wealth, low real wages that stimulated working relatively long hours and days, and some expansion consumption focused on low-quality manufactures. Despite the high levels of wealth of the upper groups living in large urban centers such as Madrid, Lisbon or Seville, Iberian consumption patterns did not experience a consumption revolution as they were highly conditioned by relatively low living standards. Although the second half of the eighteenth century was a turning point in Portugal and Spain – due to a reduction in the price of manufactured goods and greater openness to cultural foreign influences – economic and social changes excluded many disadvantaged groups of low-income earners, women, young children and poor people.

This chapter aims at placing the history of Spain and Portugal in a global context to revise many of the commonplaces that have been present for centuries about the history of both countries. It also explains this history in a comparative perspective with reference to other European countries as well as other imperial formations. Special attention is given to the different institutional systems and the political fragmentation of the Iberian Peninsula, as well as to the evolution of the different models of regional development. This also makes it possible to break with nationalizing visions of its economic performance, while the different regional trajectories and their connections are interpreted as part of a peninsular system that does not differ qualitatively from that of other regions of Europe, particularly Mediterranean Europe.The result is a more nuanced, less pessimistic – far from exceptionalism – and more realistic picture of peninsular history and a reflection on how that history has been influenced by imperial systems and globalization.

This chapter analyses the institutional architecture and political reforms of the Iberian monarchies from the sixteenth century to the end of the eighteenth century, underlining two main ideas. First, the persistence of an institutional model based upon jurisdictional autonomies until the end of the seventeenth century. This political framework was based on cooperation and negotiation allowing the participation of the different institutional and social bodies in the political decision-making process. Iberian monarchs and their ministers were able to establish alliances with local oligarchies, important noble houses, guilds and, of course, the Church. This system was partly disrupted by a movement of political reforms that reinforced State interventionism in the economy during the eighteenth century. Second, the limited economic impact of such reforms prevented an economic growth similar to other Western European territories. They faced resistance of the kingdoms and territories, which aimed to preserve their customs and the resistance of the privileged groups who struggle to maintain their properties and fiscal privileges. Both factors detained the attempts of centralizing reforms and undermined the process of increasing state capacity.

This chapter analyses the demographic dynamics in Iberia between 1500 and 1800, in a regional and European perspective, comparing the pattern of population growth, demographic distribution, urbanization and socio-professional composition of the population of the Iberian Peninsula with that of the rest of Europe in the same period. The first section reconstructs the trajectory of the total population for both Iberian countries in order to set the national trends, and to compare these trends of growth with other European countries. It also focus on population distribution across regions and highlight regional differences. Attention is paid to the prevailing “demographic system in both Iberian kingdoms, and to the available data on emigration especially towards the colonial areas. The second section offers an overview of Iberian urbanization between 1500 and 1800. The analysis of the urban dynamic takes into account not only the percentage of the total population living in urban areas (the urbanization rate), but also the morphology of the urban structure. Finally, the third section shows an overall picture of the socio-professional composition of the population in both countries.

The evolution of population and settlement in the Iberian Peninsula during the Middle Ages has similarities and differences with the rest of Western Europe. The differences arise from the process of territorial expansion and feudal colonization developed by the Christian kingdoms against Al-Andalus. That also determined diverse situations among the Christian kingdoms and regional contrasts within them. This chapter explores the evolution of population between approximately 1000 and 1500. The introduction offers a preliminary reflection on the sources and their possibilities and limits. In the second section, the patterns of population change and migration are discussed. Despite some methodological issues, some population figures and their evolution are offered for each area. This shows an evolution in which the late medieval crisis and, above all, the Black Death had a great impact, although uneven in the different kingdoms and territories. The study of rural and urban settlements is addressed in the third section, relating its characteristics and evolution to the social and economic structure in the different areas. Finally, the fourth section studies the population weight and the characteristics of the following urban socio-professional sectors: workers, artisans and merchants.

This chapter focuses on the development of Iberian Christian societies from 1000 to 1500. It deals with the evolution of output, its composition and how it spread across space. Therefore, the study sets out the main chronological and territorial milestones in the Christian economy: (a) the period of growth and expansion of the eleventh to thirteenth centuries, and that of the crisis and recovery of the fourteenth to fifteenth centuries; and (b) the areas in which economic activities were carried out, taking into account landscape features and different forms of resource used by agricultural, manufacturing and commercial activities. Throughout the text, it is possible to see that the economic model of Iberia in the Middle Ages coincided with some of the European patterns, although it presented original aspects linked, for example, to the Christian war against al-Andalus, to the demands of military supplies and to the role of the spoils of war in the construction of individual and collective fortunes. On the whole, however, the results of economic development were remarkable and do not support the undoubtedly hasty images of Iberia as a peripheral region, located in the extreme south-west of the European continent.

Iberian colonies produced the vast majority of world precious metals in the Early Modern period, which increased liquidity in the Iberian Peninsula. The chapter focuses on the relationship between liquidity and financial development – including other relevant variables such as instruments and institutions – to examine the efficiency of the financial systems in Castile and Portugal. Public credit, debt management and the cost of public debt service are considered, as well as private debt, the diversity of financial instruments and the cost of capital. Finally, the authors compile their perspective on the main similarities and differences in the development of the financial systems of Castile and Portugal.

The story told in this chapter is that of two major waves in liberalization and globalization, occurring in the second halves of the nineteenth and twentieth centuries. Iberian economies participated in both waves, but in a way different from the core European economies. During the first globalization boom, despite the smaller domestic market, Portugal was more protectionist than Spain, what probably discouraged export competitiveness in international markets, and promoted a bigger dynamism in pushing more labour and pulling more capital lending from abroad. During the second globalization, Portugal was slightly more trade-friendly and international labour integrated than its Iberian neighbour, as expected for an economy with a small domestic market, and a robust global migration network. Finally, after fast industrialization and welfare convergence process to the more prosperous Europe, both Iberian countries have recently enjoyed, within the scope of European Institutions, more balanced growth and active participation in the international economy, at least until the financial crisis of 2008.

This chapter addresses the study of the technology in use in the Iberian Peninsula during the five final centuries of the Middle Ages, with special emphasis on the Christian kingdoms but not forgetting al-Andalus. First, agricultural techniques are considered, especially concerning irrigation agriculture. This is followed by the examination of other production sectors, including the sources of energy and the most significant technological innovations, as well as their routes of dissemination and social transference. The chapter ends with the exploration of both fluvial and maritime navigation techniques used in freight transport and the conclusions, which summarize some of the most relevant technological features of this period.

This chapter surveys the economic growth experience of Iberia since the early nineteenth century. After more than a century dominated by sluggish growth and divergence from Western Europe, there was a substantial acceleration in GDP and per capita GDP growth of both Iberian economies c. 1950. As a result, in the very long term, Iberia has partially closed its initial gap with the Western European core. The chapter also shows that, in the case of Spain, the early 1950s represent a divide between a hundred years of moderate growth dominated by factor accumulation, and half a century of fast growth led by total factor productivity (TFP). By contrast, this intensive model of growth was not shared by Portugal, where per capita GDP increases so far have been mainly associated to factor accumulation, rather than to TFP increases. Finally, new estimates of regional historical GDPs show that regional inequality emerged after the first long wave of modern economic growth and market integration. By 1950, the geographical patterns of regional inequality were well established, and since then they have just been consolidated. As a result, a poor Iberia has emerged that spreads over a continuous area around the border between Spain and Portugal.