The Rain in Spain? Climate versus urban demand as causes of agricultural stagnation in eighteenth-century Spain

From an extensive data set of wheat yields at municipal level in mid-eighteenth-century Spain, a detailed statistical analysis indicates that the differences in wheat yields were mainly a consequence of different natural conditions, and that demand did not have a significant influence. Counterfactual exercises show that improvements in rainfall, altitude, or roughness of terrain would have a significant impact on average yields. The paper concludes that producers addressed the growing demand not by investing in increasing yields, but by extending the area of cultivated land, using the still abundant pastures. The low grain yields in Spain were in part a consequence of the rational behaviour of producers who faced an economic environment characterized by an elastic supply of land. Copyright , Oxford University Press.