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On Demographic Transition, Structural Change, and Economic Growth and Stagnation

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Author Info
Holger Strulik ()

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Abstract

The paper analyzes an economy with an agrarian and an industrial sector. Demand is determined by Engel's Law. Population growth follows a non--linear income dependent path according to the theory of demographic transition. In case of decreasing returns to scale in the agrarian sector the existence of a stable low--income equilibrium with high population growth can be shown. If this equilibrium is globally unstable, the system evolves towards a steady--state of perpetual economic growth and low population growth. The path of demographic transition coincides with a path of structural change from an economy specialized in agriculture to a fully industrialized economy. The introduction of an income dependent savings rate allows the interpretation of the low--income equilibrium as a limit cycle and, therefore, the explanation of high fluctuations in population growth and per capita income in least developed economies.

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File URL: http://www.rrz.uni-hamburg.de/wst/qmwps/qm398.ps
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Publisher Info
Paper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 19803.

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Date of creation: Mar 1998
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Handle: RePEc:ham:qmwops:19803

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Related research
Keywords: Demographic Transition; Economic Growth; Structural Change; Limit Cycles;

Find related papers by JEL classification:
J10 - Labor and Demographic Economics - - Demographic Economics - - - General
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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  1. Syrquin, Moshe, 1988. "Patterns of structural change," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 7, pages 203-273 Elsevier. [Downloadable!] (restricted)
  2. Birdsall, Nancy, 1988. "Economic approaches to population growth," Handbook of Development Economics, in: Hollis Chenery† & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 1, chapter 12, pages 477-542 Elsevier. [Downloadable!] (restricted)
  3. Strulik, Holger, 1999. "Demographic Transition, Stagnation, and Demoeconomic Cycles in a Model for the Less Developed Economy," Journal of Macroeconomics, Elsevier, vol. 21(2), pages 397-413, April. [Downloadable!] (restricted)
  4. Holger Strulik, 1997. "Learning-by-doing, population pressure, and the theory of demographic transition," Journal of Population Economics, Springer, vol. 10(3), pages 285-298. [Downloadable!] (restricted)
  5. Ogaki, Masao, 1992. "Engel's Law and Cointegration," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 1027-46, October. [Downloadable!] (restricted)
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  6. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March. [Downloadable!] (restricted)
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  7. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October. [Downloadable!] (restricted)
  8. Sato, Ryuzo & Niho, Yoshio, 1971. "Population Growth and the Development of a Dual Economy," Oxford Economic Papers, Oxford University Press, vol. 23(3), pages 418-36, November. [Downloadable!] (restricted)
  9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
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