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Growth on a Finite Planet: Resources, Technology and Population in the Long Run

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  • Pietro F. Peretto
  • Simone Valente

Abstract

We characterize the interactions between technological change, natural resource scarcity and population dynamics in a Schumpeterian model with endogenous fertility choices. We show that there exists a pseudo-Malthusian equilibrium in which population is constant and income grows at a constant rate: the equilibrium population level is determined by resource scarcity but is independent of technology. The stability properties are driven by (i) the income reaction to increased resource scarcity and (ii) the fertility response to income dynamics, and ultimately depend on whether labor and resources are complements or substitutes in production. Under substitutability, the pseudo-Malthusian equilibrium is a global attractor. Under complementarity, population follows diverging paths of explosion or implosion.

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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c015_008.

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Length: 27 pages JEL Classification: Endogenous Innovation, Resource Scarcity, Population Growth, Fertility Choices
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:deg:conpap:c015_008

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Keywords: E10; L16; O31; O40;

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Cited by:
  1. Halvor Mehlum & Ragnar Torvik & Simone Valente, 2013. "China's Savings Multiplier," Working Paper Series 14713, Department of Economics, Norwegian University of Science and Technology.
  2. Attar, M. Aykut, 2013. "Growth and Demography in Turkey: Economic History vs. Pro-Natalist Rhetoric," MPRA Paper 47275, University Library of Munich, Germany.

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