The first commodity boom in South America (1790-1830)

The first commodity boom in South America (1790-1830)

Project: THE FIRST COMMODITY BOOM IN SOUTH AMERICA: GOLD AND SILVER EXCHANGE RATES IN BRAZIL AND SPANISH AMERICA DURING THE WARS IN EUROPE (1790-1830)

Funding: British Academy Newton Mobility Grant 2017, Application NMG2R2\100176

Participants: Alejandra Irigoin (LSE), Thales Pereira (UFN)

Description

This project revisits the historical narrative about transformations in the economy and commerce of Brazil and the Spanish Southern cone more generally during the French and Napoleonic Wars in Europe. This research considers a new and yet unexplored factor: the consequences of monetary developments in Europe. An extraordinary pressure on silver and gold prices in Europe resulted in an overvaluation of the local exchange rate of sterling, which propitiated the local production of non-precious metals for exports and the inflow of British imports; textiles in particular. The research has the objective to understand how monetary events affected Brazilian economic development during the 19th century, a critical period when Brazil set its economic, financial and fiscal institutions.

Presentations

Workshop at the University of São Paulo (November, 2018)

Trade between Brazil and Britain during the early 19th century. Institute of Historical Research (January, 2019)

Prelimary results

There are two working papers in progress.

Paper A: the effect of the French Revolutionary and Napoleonic Wars on prices of tradables in Brazilian markets.

Paper B: on the silver and gold from latin America during Britain’s suspension of cash payments – ie the Restriction period – 1797-1819

Data collected will be posted here after publication and will be available upon request.


Data example from paper A

Main sources: British National Archives, Hermanoteca da Biblioteca Nacional

In Figure A1, the shaded area is the period of the French Revolutionary and Napoleonic Wars (1793-1815).

Figure A1: Average price (réis) of cocoa, coffee, and rice from Pará, and sugar from Pernambuco, 1756-1830.

 

In Figure A2, the shaded area (1807-1814) is the Napoleonic blockade period.

Figure A2: Relative prices in Rio de Janeiro, 1763-1820

 

To calculate the cotton price difference in Figure A3, cotton prices in Bahia are in Sterling, using the exchange rate from Rio de Janeiro. Prices for Bahia (the blue line) are in mil-réis. Insurance rates are the amount of Guineas “per cent” (as reported in newspapers), which we assume is the estimated value of the total cargo. The high insurance premia in May 1817 was due to local revolts in Brazil.

Figure A3: Cotton trade between Salvador, Bahia, and London. June 1813 – July 1819


Data example from paper B

Main sources: Bank of England Archive, British National Archives

Figure B1: Reserves of foreign coin and bullion, 1794-1819 (Bank of England)

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Thales Zamberlan Pereira
Assistant Professor of Economics