Foreign capital in 19th century Spain's investment boom Articles uri icon

publication date

  • May 2020

start page

  • 314

end page

  • 331


  • 2


  • 24

International Standard Serial Number (ISSN)

  • 1361-4916

Electronic International Standard Serial Number (EISSN)

  • 1474-0044


  • Spain's investment boom (1850&-1874) has been largely attributed to capital inflows. SudriĆ  challenged the consensus on the basis of Moro et al. capital balance estimates. Dishoarding of bullion and previous savings would have catered for an increasing investment demand. I argue that the empirical basis for SudriĆ 's claim is flawed. Moro et al. underestimated the net capital inflow and biased upwards the change in reserves. The current account deficit resulted from an inflow of capital that allowed investment to raise facilitating imports of capital goods and raw materials. Foreign capital contributed significantly to the investment boom.