Argues that during the early modern period in Europe living standards gradually rose not only because probate inventories reveal that people were acquiring more and better quality durable goods. They were also increasingly allocating resources to the acquisition of the skills of literacy. Partly, this human capital served to enhance their productivity and earning ability, but it also served for pleasure, edification and gaining status and to this extent it should be considered as a consumer durable too. A quantitative exercise tries to show that if this is factored into the more traditional ‘material consumption’ approach, it can lead to a significant reconsideration of the standard of living debate, in particular, as regards the eighteenth century.

We construct the first time-series for Portugal’s per capita GDP for 1527–1850, drawing on a new database. Starting in the early 1630s there was a highly persistent upward trend which accelerated after 1710 and peaked 40 years later. At that point, per capita income was high by European standards, though behind the most advanced Western European economies. But as the second half of the eighteenth century unfolded, a phase of economic decline was initiated. This continued into the nineteenth century, and by 1850 per capita incomes were not different from what they had been in the early 1530s.

This study offers an estimate of Portuguese income inequality over a period of more than 200 years. It is presented in three widely spaced benchmarks: 1565, 1700 and 1770. This entirely new index is based in large measure on a littleresearched annual personal income tax (décima) instituted in 1641. It covered all social classes, including nobility and clergy and every form of household earnings, and permits therefore a singularly accurate measure. It allows us to conclude that, in contrast with early modern Europe in general, Portugal experienced a notable decline in economic inequality. Several freshly minted quantitative indicators enable us to conclude that the burden of the explanation for this apparently 'deviant' behaviour can be ascribed to changes in the functional distribution of income. Significant transformations in Portuguese agriculture-towards labour-intensive products like maize and wine-permanently shifted the wage-rental ratio in favour of labour. The skill premium fell but its contribution was relatively modest. It was a time of sustained economic growth, but this was not associated with pronounced urbanization or industrialization.

As long as Portugal was on the gold standard, the Bank of Portugal sought to help stabilize the currency at the exchange rate to which the country was committed. Because it was subject to political and other non‐economic constraints, the bank carried out discount rate interventions sparingly, although in accordance with what could be termed the contemporary ‘science’ of central banking. Consequently, it had to intervene frequently in the currency markets, usually in covert fashion, in order to conciliate the needs of convertibility with this less than orthodox stance towards the gold standard. This article also shows how the bank was able to keep on repeatedly infringing the ‘rules of the game’ with success for almost 30 years, and raises the question of the sustainability of such a state of affairs.

When and why did the Portuguese become the shortest Europeans? In order to find the answer to this question, we trace the trend in Portuguese living standards from the 1720s until recent times.We find that during the early nineteenth century average height in Portugal did not differ significantly from average height in most other European countries, but that when, around 1850, European anthropometric values began to climb sharply, Portugal's did not. In a panel analysis of 12 countries, we find that delay in human-capital formation was the chief factor hindering any improvement in the biological standard of living in Portugal.I t was Portugal's fifteenth-and sixteenth-century seafaring scientists and explorers who placed this small country at the cutting edge of maritime science and navigation and thereby transformed the global status of the rest of Europe as well. Their expeditions along the African west coast and to Latin America, not to mention Vasco da Gama's discovery, on his first voyage (1497-9), of the sea route to India, transformed their contemporaries' consciousness of the world that lay beyond the horizon. However, since those glory days the Portuguese have come to feel that their country lags behind the rest of Europe-and they are right, if anthropometry is taken as a welfare indicator: recent data indicate that the Portuguese are on average shorter than any other European nationality.2 When and why did the Portuguese slip to last place in the European height race?To tackle this question, a two-step approach is adopted. First, height development is reconstructed over almost three centuries, from the 1720s to the 1980s, and it is found that at the beginning of that time span Portuguese heights were in