Malthusian regime: Conclusion

However, if population growth is positive in che Modern Growth regime, then education and technological progress will continue to rise, and, similarly, if population growth is negative they will fall. In fact, the model makes no firm prediction about what the growth rate of population will be in the Modern Growth regime, other than that population growth will fall once the economy exits from the Malthusian region. It may be the case that population growth will be zero, in which case the Modern growth regime would constitute a global steady state, in which e and g were constant. Alternatively, population growth could be either positive or negative in the Modern Growth regime, with e and g behaving accordingly add comment.

Concluding Remarks

This paper develops a unified endogenous growth model in which the evolution of population, technology, and output growth is largely consistent with the process of development in the last millennia. The model generates an endogenous take-off from a Malthusian Regime, through a Post-Malthusian Regime, to a demographic transition and a Modern Growth Regime. In early stages of development – the Malthusian Regime – the economy remains in the proximity of a Malthusian trap, where output per capita is nearly stationary and episodes of technological change bring about proportional increases in output and population.

In the intermediate stages of development – the Post-Malthusian Regime – the intensified pace of technological change that is caused by the increase in the size of population during the Malthusian regime permits the economy to take off. Production takes place under a state of technological disequilibrium in which the relative return to skills rises, inducing the household to shift its spending on children toward quality and away from quantity. Output per capita increases along with an increase in the rate of population growth and human capital accumulation. Eventually, rapid technological progress which results from high human capital accumulation triggers a demographic transition in which fertility rates permanently decline.

The model abstracts from several factors that are relevant for economic growth. Differences between countries in the determination of population growth or in the process of technological change (due to cultural factors, for example) would be reflected in their ability to escape the Malthusian trap and in the speed of their takeoff. Similarly, differences in policies, such as the public provision of education, would change the dynamics of the model. One interesting possibility that the model suggests is that colonialism, by effectively expanding the stock of land available for production, may have played a role in facilitating Europe’s emergence from the Malthusian trap.

While our model presents a unified description of the development process followed by Europe and its offshoots, it is clearly not fully applicable to countries that are developing today For currently developing countries, a large stock of pre-existing technology is available for import, and so the relationship between population size and technology growth, which helped trigger the demographic transition in Europe, is no longer relevant. Similarly, the relationship between income and population growth has changed dramatically, due to the import of health technologies. Countries that are poor, even by the standards of Nineteenth Century Europe, are experiencing growth rates of population far higher than those ever experienced in Europe.