Tag Archives: Asia

On the discrepancies between the original Maddison dataset and more recent GDP reconstructions

Angus Maddison was one of the most cited economists of the 20th century.

I often get emails asking me about Maddison’s figures, because I have worked a lot on historical national accounts reconstructions (see here, here, or here), and I was for 2 years faculty in the University of Groningen, where Maddison worked, and this is a justifiably renowned place for this type of work.

As an example, I copy here the relevant bits from an email that a friend and colleague recently wrote me. This colleague is asking about Portugal’s figures, but notice that a lot of what I will have to say can be generalized to other regions:

“The updated Maddison dataset has Portuguese GDP per person at 985 in 1530 (I assume in 1990 dollars).  1239 in 1600.  1192 in 1700, 1614 in 1750, 1330 in 1800 and 1225 in 1850.

The original Maddison dataset has Portuese GDP per person as 425 in 1000, 606 in 1500, 740 in 1600, 819 in 1700, and 923 for 1820.

Do you have any insight into these discrepancies?”

I do. In short, for this and many other cases, Maddison’s figures are simply made up. Read more below.

(Also, do notice that the modern Maddison project database is using 2011 prices, not 1990 ones, so for instance Jaime Reis’ and my own figures for Portugal, 1527-1850, are presented in 1990 prices in our paper, but the Maddison project pushed this into 2011 prices, so the levels may look different but they are not; the underlying real indexes are the same; our figures are the ones included in the Maddison project.)


Nothing I say here means to disparage Angus Maddison. He was a pioneer in these things (especially in so far as putting together in one place many estimates which in fact were often produced by many people – this had a lot of merit, though he’d very frequently get the citations that truly belonged to those who did the original work, but that’s is another story). He did stimulate many of us to continue these lines of inquiry, and do a better job. He was great.

But do notice that in one of the first posts in this blog, I did write,

“Despite the importance that Maddison’s GDP and population figures had in stimulating our thinking about economic history and development, it is fair to say that his pre-1820 figures were less than solid.”

The best way to think about Maddison’s estimates, especially for the period before 1820, is: when estimates did not exist (and they usually did not), he’d make very strong assumptions.

If you are an economist working on long-run growth you need to be wary of these assumptions. For China, real income per capita was stuck at exactly $600 “international” 1990 GK dollars between 1300 and 1850, according to Maddison in his late “Chinese Economic Performance in the Long Run” book (p. 157). Does this show that China was Malthusian? no, because Maddison effectively assumed China was Malthusian, and this is why he chose these numbers. I once saw an economist present at a conference and looking frankly ridiculous by claiming he had found that China was Malthusian for most of its history by using Maddison’s numbers. And, by the way, we now know that Maddison was not quite right, as you can read here.

Part of the problem is that Maddison often presents Tables in a way that makes it difficult to trace the original sources (this, I dare say, often made scholars un-aware that those were not his actual estimates, but those of others, which let to the citations problem I mentioned above).

How did he get to those figures? If you look into Volume 2 of his “World Economy” books, which is where most figures are put in Tables together and hence where typically people look first, or if you look online, in this original page, there are none listed. The historical statistics excel file avaliable even says “Copyright Angus Maddison” once you open it…

If you dig deep in his book, however, you do find some info. For population, continuing with the Portugal example, you find in Volume 1, p. 230 that “Population of 13 small West European countries assumed to move parallel to the total for the 12 countries above“. The latter were bigger countries, but the source of most of those is given as Maddison (1991), so you’d have to keep tracking other references to see how even those were actually done. Once you find the answer you will see that the evidence is rather thin. Needless to say, modern reconstructions are much more careful than this.

As for GDP per capita, in Volume 1, p. 249 he writes:

“I assumed a growth rate of Spanish GDP per capita of 0.25 per cent a year from 1500-1600, no advance in the seventeenth century, and some mild progress from 1700 to 1820. I adopted a similar profile for Portugal”.

That’s it. He simply assumed the numbers — vaguely citing only the following as inspiration, though not using it directly and citing with the following caveats (notice his own choice of words): “Yun’s (1994) rough per capita GDP estimates for Castile (about three-quarters of Spain) … his indicators for secondary and tertiary activity are weak“.

So, Maddison’s Portugal GDP per capita numbers are hence simply assumed to behave similarly to those of Spain, which are simply assumed by himself.

By contrast with this, here are the primary, archival sources that Jaime Reis and I use in our recent reconstruction of Portuguese per capita GDP, 1527-1850, which is forthcoming in the June edition of the Journal of Economic History. I list these here as an example, so you can see how much more exhaustive modern work is that what Maddison did. You can see a picture of what these account books look like if you click in our appendix, here.

I hope this discussion has been sufficiently clear on the origins of the differences between modern estimates vis-a-vis those of Maddison. It should be by now clear why they are considerably different at times. And furthermore – if you read our article, you will see that Portugal does not behave like Spain at all…

Primary Sources

We have collected both prices and wages from account (receipts and expenditures) books of the institutions listed below. Almost all were purchasers both of commodities and labor services. Some of them were also sellers of certain commodities produced by them. The account books of these institutions always display: the date of the transaction, the gross and unit value of the commodity, the unit of measurement employed, the quality of the product (e.g., coarse or fine paper, mutton, pork, or beef), and particular features of the transaction.

In order to proxy missing values we sometimes used a similar product or labor type (e.g., tallow candles for wax candles or carpenters for masons, both being skilled workers) by adjusting its price using a price ratio with the original product at a nearby year. Furthermore, to complete our Linen series for Lisbon during 1766–1829, we relied on Madureira (1997), listed in the secondary sources section.

Lisbon and Its Hinterland

Casa da Congregação do Oratório, Casa da Saúde, Lº 1º Receita e Despesa (Arquivo Municipal de Lisboa)

Casa dos Contos: Archive of the Court of Auditors

Convent of Nossa Senhora da Luz: National Archive

Convent of Santa Marta de Jesus: National Archive

Convent of Santo Alberto: National Archive

Convent of São Domingos de Lisboa: National Archive

Convent of Carmo, Expenses of the Sacristy: National Archive

Hospital of S. José: National Archive

Hospital of All Saints: National Archive

Holy House of Mercy of Almada: Archive of the Holy House of Mercy of Almada

Holy House of Mercy of Lisbon: Archive of the Holy House of Mercy of Lisbon

Holy House of Mercy of Lisbon, Shelter: Archive of the Holy House of Mercy of Lisbon

Holy House of Mercy of Lisbon, Foundlings: Archive of the Holy House of Mercy of Lisbon

Monastery of Chelas: National Archive

Monastery of S. Dinis de Odivelas: National Archive

Convent of Santo António da Convalescença: National Archive

Fabric of the See of Lisboa: National Archive

Seminary of Santa Catarina: National Archive

Administration of the Royal Household, Kitchens: National Archive

Porto and Its Hinterland

For Porto, we rely on Godinho (1955) as a secondary source plus the following primary sources:

Casa Pia Orphanage (administration): Porto District Archive

The See of Porto (revenues and expenditure): Porto District Archive

Colégio dos Órfãos, Daily Expenditure: Porto Municipal Archive

Porto Holy House of Mercy, Jailhouse Expenditure: Archive of the Santa Casa da Misericórdia do Porto

Porto Holy House of Mercy, General Hospital: Archive of the Santa Casa da Misericórdia do Porto

Porto Holy House of Mercy, Interments: Archive of the Santa Casa da Misericórdia do Porto

Porto Holy House of Mercy, Hospice for the Homeless: Archive of the Santa Casa da Misericórdia do Porto

Porto Holy House of Mercy, D. Lopo Hospital: Archive of the Santa Casa da Misericórdia do Porto

Porto Holy House of Mercy, Foundling Home: Archive of the Santa Casa da Misericórdia do Porto

Municipality of Porto, Palace of the Municipality: Porto Municipal Archive Municipal Abattoir, Porto Municipality: Porto Municipal Archive

Coimbra and Its Hinterland

University of Coimbra, Refectory: Archive of the University of Coimbra

Hospital of the University, Accounts and Administration: Archive of the University of Coimbra

Hospital of Nossa Senhora da Conceição, Accounts: Archive of the University of Coimbra

College of São Pedro, Kitchen: Archive of the University of Coimbra

Colégio de São Pedro, Book of purchases: Archive of the University of Coimbra

Expenditure on the Churches of the Reverend Chapter of the See of Coimbra: Archive of the University of Coimbra

Chapel of S. João da Sé, Revenue and Expenditure: Archive of the University of Coimbra

Chapter of the See, register of expenditures: Archive of the University of Coimbra

Fabric of the College of São Pedro, Register of Expenses: Archive of the University of Coimbra

Municipal Council of Coimbra, Revenue and Expenditure: Archive of Coimbra

Municipality Works of the Church of the See of Coimbra, Expenses: Archive of the University of Coimbra

University of Coimbra, Receipts and Expenditure: Archive of the University of Coimbra

Hospital of São Lázaro, Receipts and Expenditure: Archive of the University of Coimbra

Holy House of Mercy of Coimbra, Income and Expenditure: Archive of the Holy House of Mercy of Coimbra

Episcopal Mitre of Coimbra, Expenses: Archive of the University of Coimbra

Register of the Granary of the Chapter of Coimbra: Archive of the University of Coimbra

Royal Hospital of Coimbra, Registers of Expenditure: Archive of the University of Coimbra

Évora and Its Hinterland

For Évora, we rely on Santos (2003) and Godinho (nd) secondary sources plus the following primary sources:

Royal Public Granary of Évora, Accounts: Archive of the District of Évora

Évora Aqueduct, Accounts of the Repairs and Maintenance: Archive of the District of Évora Repairs of Évora City Streets ,Wages and other Expenditure: Archive of the District of Évora

Casa Pia Orphanage, Revenues and Expenditures: Archive of the District of Évora

Casa Pia, Hospice of Nossa Senhora da Piedade, Accounts: Archive of the District of Évora

Holy House of Mercy, Books and Accounts: Archive of the District of Évora

Convent of Paraiso, Accounts: Archive of the District of Évora

Convent of the Saviour, Accounts: Archive of the District of Évora

College of Nossa Senhora da Purificação: Archive of the District of Évora

Secondary Sources

Costa, Leonor, and Jaime Reis. “The Chronic Food Deficit of Early Modern Portugal: Curse or Myth?” Análise Social LII (2017): 416–29.

Godinho, Vitorino Magalhães. Introdução à história económica. Lisboa: Livros Horizonte, n.d.

———. Prix et monnaies au Portugal 1750–1850. Paris: Librairie Armand Colin, 1955.

Madureira, Nuno. Mercados e Privilégios. A Indústria Portuguesa entre 1750 e 1834. Lisboa: Estampa, 1997.

Santos, Rui. Sociogénese do Latifundismo Moderno: Mercados, Crises e Mudança Social na Região de Évora, Séculos XVII a XIX. Lisboa: Banco de Portugal, 2003.


addendum: I originally wrote in this post, a few hours ago, that the Maddison project now corrects for inflation by expressing variables in 2015 dollars, but this should be 2011. I heard they were thinking of changing to 2015 in the next version.

How important was colonial trade for the rise of Europe?

I recently gave an interview to Garret M. Petersen of the Economics Detective Radio where we discuss some of my work. You can listen to it in this link: Money, Trade and Economic Growth in the Early Modern Period (interview).

In the interview, we discuss at one point the matter of how important was colonial (and otherwise intercontinental) trade for macroeconomic outcomes such as growth and urbanization in Europe. As I notice in the interview, my position on this (see my Cliometrica article for details) stands between two extremes:

  1. that of Eric Hobsbawm or Immanuel Wallerstein, who argue Europeans profited a huge deal from the colonies. This view is very prevalent in some political circles today, if not the person on the street, who often believes that “imperialism” or “colonialism” is what what made the West Rich, through exploitation of the rest of the world. It is related to “dependency theory”.
  2. by contrast, that of many if not most economic historians, who believe that such trade (and the violence that came with it) didn’t matter very much for outcomes back in Europe.

The latter view became the orthodoxy among economists and economic historians after Patrick O’Brien’s 1982 paper, which in one of many of Patrick’s celebrated phrases, claims that “”the periphery vs peripheral” for Europe. He concludes the paper by writing:

“[G]rowth, stagnation, and decay everywhere in Western Europe can be explained mainly by reference to endogenous forces. … for the economic growth of the core, the periphery was peripheral.”

This is the view that remarkable scholars such as N. Crafts, Deirdre McCloskey, or Joel Mokyr repeat today (though Crafts would argue cotton imports would have mattered in a late stage, and my reading of Mokyr is that he has softened his earlier view from the 1980s a little, specifically in the book The Enlightened Economy.) Even recently, Brad deLong has classifyied O’Brien’s 1982 position as “air tight”.

Among economists and economic historians more on the economics side, I would say that O’Brien’s paper was only one of two strong hits against the “Worlds-System” and related schools of thoughts of the 1970s, the other hit being Solow’s earlier conclusion that TFP growth (usually interpreted as technology, though there’s more to it than that) has accounted for economic growth a great deal more than capital accumulation, which is what Hobsbawm and Wallerstein, in their neo-Marxist framework, emphasize.

Let me be clear from the outset that the idea that it was European exploitation of foreign peoples that made it rich is, by itself, highly simplistic, and, in short, nonsense. The view held by many historians and members of the public, that colonialism essentially equals why the west is rich is evidently false. This view is seductive in part because of the nasty violent means and institutions (such as slavery), clearly immoral from the normative standpoint of our times, which was often associated with it. Even if partially true it fails to ask why was Europe the part of the world capable of doing this, which in turn raises the obvious suspicion that the deep causal factor lies elsewhere.

To a degree in the interview I react more against the opposite version, the point (2) above, the idea that it did not matter at all. But this is because I hold the fact that (1) is false as more evident.

One irony with all of this is that for more than a decade now, Patrick O’Brien has changed his mind. He has, indeed refereed to this in writing (as far back as 2006), and several people have witnessed seminars where the speaker mentions “as Patrick O’Brien has concluded, colonies didn’t matter for European development…” only to have Patrick raise and kindly but firmly inform the speaker of his change of heart.

Last year at the American Economic Association meeting in S. Francisco, my good friend Deirdre McCloskey even told me in disappointment how me she feels Patrick should go back to his old view! But I feel there’s good reason for his change of mind. Patrick certainly hasn’t adopted a Hobsbawm-Wallerstein type of position. He is now simply of the view that, at the margin, trade with other parts of the world did matter for European development. It’s does not explain everything, but it mattered a bit. This is what I find empirical support for in my own work.

My discussion has focused on the impact of trade for the European economy.  As Brad deLong notices, a different matter is that of whether such trade had an impact on other parts of the world (positive or negative). Patrick O’Brien sometimes refers to himself as a “mercantilist”. So I conclude by noting that some ideas related to the benefits of protectionism (once an idea almost banished from the realms of “serious” economics), especially as it applies to countries that are not at the frontier, has been taking hold among some young and very competent economic historians, such as Réka Juhász or Luigi Pascali. Perhaps I’ll write more about this in a future post.





Spending a Windfall


The paper “Spending a Windfall: American Precious Metals and Euro-Asian Trade 1531-1810”, by André C. Silva and myself, is now available as a GGDC working paper.

Here’s the abstract:

During the early modern period, Asia ran a large current account surplus with Europe. We show that the critical factor to stimulate Euro-Asian trade was not the new trading routes to Asia, but the European access to American precious metals. We use a dynamic general equilibrium model to reproduce historical data and calculate alternative scenarios. We find that European imports of Asian goods were up to thirteen times higher than they would have been without new routes and without precious metals. The effect of American precious metals is six times larger than that of the discoveries of new trading routes.

90% of the European imports of porcelain, silk, tea, and other luxuries from Asia during the early modern period were paid for in silver. The traditional and still currently accepted explanation by most historians for this imbalance of early modern Euro-Asian trade relies on cultural factors. It is said that Asians have always had a penchant for hoarding treasure (this is the view of Hamilton, Keynes, Kindleberger, and Maddison). By contrast, our explanation for the patterns of Euro-Asian trade in the early modern period does not rely on different preferences for Asians. Instead, the observed trade patterns emerge as a natural consequence of rational agents taking decisions in a dynamic general equilibrium context.

Our model of international trade has two “countries”, two goods and money. The demand for money is obtained with a money-in-utility specification. The two agents, denoted Europe and Asia, have identical preferences. Each agent produces a domestic good. All of the silver windfall is given to the European agent. There are also transaction costs, which apply to international transactions only.

We feed the historical data to the model. The windfall is given to the European agent. From 1500 to 1800, 85% of the world’s silver and over 70% of world’s gold came from America. The following figure (taken from Figure 4 in the paper) shows, in blue, the annual amount of “discoveries” of precious metals in America during 1531-1810, expressed in grams of silver per capita. In red, in shows our counterfactual: a world where new routes to Asia were found, but no precious metals existed in America.


The following figures (also taken from Figure 4 in the paper) then decouple the results of the historical and counterfactual scenarios for consumption and trade between Europe and Asia. In this one we can see that thanks to the new routes and the precious metals (mainly silver), European consumption of Asian goods was about 13 times what it would have been by the second quarter of the seventeenth century. However, most of that effect was due to the availability of American precious metals and not to the new trade routes themselves (note that two new routes to Asia were found, one through the Cape of Good Hope and the other through the Pacific). The new routes (and its associated technical and organizational change) would have at most doubled the previous trade levels.


Not only did the new routes have a much smaller economic impact on trade than did American precious metals, but the sign of their effect on trade patters was also different. This is clear if we look at what happens to net exports of European goods to Asia: in the counterfactual world of no precious metals existing, they increase. Historically,  we know that this wasn’t the case.



As the figures suggest, our simulations show that the combined effect of the discovery of precious metals in America plus new trade routes to Asia led to Euro-Asian trade volumes that were up to 13 times what they would have otherwise been. After peaking in the second quarter of the seventeenth century the effect diminishes over time as the early modern period advances but is still over 10 times as late as 1750.

In the paper, we also consider the effect of rising incomes in Europe, and show that its effect was marginal relative to what can be attributed to the windfall of precious metals.

Early modern Euro-Asian trade started off a historical dynamic process with broad consequences for Europe. While foreign trade accounted for a small percentage of European GDP at this time, it provided dynamic expansion opportunities. Early modern trade with Asia led to the emergence of mercantile companies such as the Dutch VOC and the English East India Company, which in many ways were the prototype for modern multinationals.71 It permitted the development of modern financial markets in Amsterdam and London. It induced an industrious revolution which encouraged additional labor input and market participation in Europe, necessary preconditions for the process of modern economic growth and for the industrial revolution itself. It stimulated economic growth and urbanization, through a process of spillovers and agglomeration economies. Trading with Asia (and America), may have also induced a shift in the wealth and political power from the land-owning elite to the hands of a merchant, entrepreneurial class. Positive spillovers also resulted from the increased inter-continental exchange of ideas. Finally, international trade and war always came together, and external warfare was one of the most powerful drivers behind European state-building.