Endogenous Growth, Population Growth and the Repugnant Conclusion
AbstractThis paper studies the impact of endogenous population change on economic growth, analyzing the simplest optimal endogenous growth model, an AK type model, driven by human capital accumulation. We show that in steady state both demographic change and economic growth are constant, but the rate of these growth can be positive, negative or null accordingly to parameter values. Population dynamics is determined by the difference between the stationary fertility rate and the exogenous mortality rate: if this is positive population size indefinitely increases, otherwise it reaches a stationary level, which can be positive (if the difference is null) or null (if it is negative). If fertility is strictly lower than mortality, population size will constantly decrease in finite time and we end up with a complete collapse of the economy, characterized by the total extinction of the population. We also analyze the problem of optimal population size and its relationship with growth. The seminal work of Parfit (1984) suggests that total utilitarianism leads to increase population size indefinitely, even if it the average welfare tends to zero. We show that in our model economy, under certain parametric conditions, the repugnant conclusion holds; in particular, this happens when consumption growth is negative and the stationary fertility rate is higher than the exogenous mortality rate.
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Bibliographic InfoPaper provided by Universitá degli Studi di Milano in its series UNIMI - Research Papers in Economics, Business, and Statistics with number unimi-1103.
Date of creation: 12 Apr 2010
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Economic Growth; Human Capital Accumulation; Endogenous Fertility; Optimal Population; Repugnant Conclusion;
Other versions of this item:
- Simone MARSIGLIO, 2010. "Endogenous growth, population growth and the repugnant conclusion," Departmental Working Papers 2010-14, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
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- Marsiglio, Simone & La Torre, Davide, 2012. "Population dynamics and utilitarian criteria in the Lucas–Uzawa Model," Economic Modelling, Elsevier, vol. 29(4), pages 1197-1204.
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