In many colonial societies there exists a close relationship between population size and economic wellbeing. Spanish Central America illustrates this relationship clearly. The economic prospects of the colony were intimately linked to its historical demography. Thus with a large population from which to draw labor, the initial economic outlook seemed promising. As population declined during the sixteenth and seventeenth centuries, a severe economic depression set in. When population began to increase towards the end of the seventeenth and throughout the eighteenth century, the economy revived. 1