Around 1500 Spain and Portugal were among the most affluent nations in the world, and had income levels that were similar to those of other Western European countries. Three hundred years later the Iberian economies had lost their economic supremacy and fell behind all the main European powers. When did the first two global empires in history lose their hegemony to become secondary actors? What were the foundations of the collapse that explains the divergence from north-western Europe? This chapter addresses these issues and describes what is now known about the long-term trends of Iberian economies between 1500 and 1800.