War, Taxes and Gold: the Inheritance of the Real *
1 Revised, March 8, 1998 WAR, TAXES AND GOLD: THE INHERITANCE OF THE REAL * Jorge Braga de Macedo Faculty of Economics, Nova University at Lisbon; NBER and CEPR Álvaro Ferreira da Silva Faculty of Economics, Nova University at Lisbon Rita Martins de Sousa Institute of Economics and Management, Technical University of Lisbon * Prepared for the 12th International Economic History Congress, Seville, Spain, August 1998, A session on “The legacy of Western European Fiscal and Monetary Institutions for the New World: XVII-XIX century”. An earlier version was presented at the pre-session in Buenos Aires, Argentina on 7 April, 1997. We are grateful to participants for comments, to Mike Bordo for the invitation and to Fernando Teixeira dos Santos, currently in public service, for having agreed that we replace him in the assignment. Even though the move from Porto to universities in Lisbon should not have changed the nature of the inheritance, the authors remain responsible for shortcomings in the interpretation. We wish to honor the memory of Professor Teixeira Ribeiro, of Coimbra University and the Lisbon Academy of Science. Born in 1908, he influenced generations of Portuguese economists in the field of public finance and monetary economics (the latter is stressed in Braga de Macedo, 1980). He died when we were finalising the first draft, exactly one-year ago. 2 ABSTRACT The inheritance of the real (the currency of the Kingdom of Portugal, from 1435 to 1910) on national fiscal and monetary institutions is presented as a response to the challenge of foreign invasions and of their aftermath. The Portuguese crown had to preserve national sovereignty over borders defined in the XIII century in the face of external military threats from neighboring states.
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