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The determinants of income in a Malthusian equilibrium

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  • Sharp, Paul
  • Strulik, Holger
  • Weisdorf, Jacob

Abstract

This study constructs a simple, two-sector Malthusian model with agriculture and industry, and uses it to identify the determinants of income in a Malthusian equilibrium. We make standard assumptions about preferences and technologies, but in contrast to existing studies we assume that children and other consumption goods are gross substitutes. Consistent with the conventional Malthusian model, the present theory shows that productivity growth in agriculture has no effect on equilibrium income. More importantly, we also show that equilibrium income varies, not just with the death rate as has recently been demonstrated in the literature, but also with the level of productivity in the industrial sector. An empirical analysis using data for pre-industrial England lends support to both hypotheses.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 97 (2012)
Issue (Month): 1 ()
Pages: 112-117

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Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:112-117

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Related research

Keywords: Malthusian model; Subsistence income;

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References

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  1. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World
    [A Farewell to Alms: A Brief Economic History of the World]
    ," Introductory Chapters, Princeton University Press.
  2. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "The Physiological Foundations of the Wealth of Nations," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-480, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  3. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, vol. 101(5), pages 2003-41, August.
  4. Allen, Robert C., 1992. "Enclosure and the Yeoman: The Agricultural Development of the South Midlands 1450-1850," OUP Catalogue, Oxford University Press, number 9780198282969.
  5. Juselius, Katarina, 2006. "The Cointegrated VAR Model: Methodology and Applications," OUP Catalogue, Oxford University Press, number 9780199285679.
  6. Esteban A. Nicolini, 2006. "Was Malthus Right? A Var Analysis Of Economic And Demographic Interactions In Pre-Industrial England," Working Papers in Economic History wh060601, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  7. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
  8. Strulik, Holger, 2008. "A Note on Economic Growth with Subsistence Consumption," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-405, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  9. Holger Strulik & Jacob Weisdorf, 2008. "Population, food, and knowledge: a simple unified growth theory," Journal of Economic Growth, Springer, vol. 13(3), pages 195-216, September.
  10. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
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Citations

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Cited by:
  1. Ken Tabata, 2013. "The Expansion of the Commercial Sector and the Child Quantity-Quality Transition in a Malthusian World," Discussion Paper Series 105, School of Economics, Kwansei Gakuin University, revised May 2013.
  2. Strulik, Holger, 2009. "Knowledge and Growth in the Very Long-Run," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-414, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  3. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "The Physiological Foundations of the Wealth of Nations," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-480, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  4. Holger Strulik, 2012. "From Worship to Worldly Pleasures: Secularization and Long-Run Economic Growth," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 116, Courant Research Centre PEG.

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