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The determinants of income in a Malthusian equilibrium

Author Info

  • 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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

Keywords: Malthusian model; Subsistence income;

Find related papers by JEL classification:

  • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
  • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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  1. Ashraf, Quamrul & Galor, Oded, 2008. "Dynamics and Stagnation in the Malthusian Epoch: Theory and Evidence," CEPR Discussion Papers 7057, C.E.P.R. Discussion Papers.
  2. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
  3. Nicolini, Esteban A., 2006. "Was malthus right? a var analysis of economic and demographic interactions in pre-industrial England," IFCS - Working Papers in Economic History.WH wh060601, Universidad Carlos III de Madrid. Instituto Figuerola.
  4. Gary D. Hansen & Edward C. Prescott, 2002. "Malthus to Solow," American Economic Review, American Economic Association, vol. 92(4), pages 1205-1217, September.
  5. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "The Physiological Foundations of the Wealth of Nations," Hannover Economic Papers (HEP) dp-480, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  6. 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.
  7. Allen, Robert C., 1992. "Enclosure and the Yeoman: The Agricultural Development of the South Midlands 1450-1850," OUP Catalogue, Oxford University Press, number 9780198282969, December.
  8. 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.
  9. Strulik, Holger, 2008. "A Note on Economic Growth with Subsistence Consumption," Hannover Economic Papers (HEP) dp-405, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  10. 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.
  11. 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.
  12. Juselius, Katarina, 2006. "The Cointegrated VAR Model: Methodology and Applications," OUP Catalogue, Oxford University Press, number 9780199285679, December.
  13. Kevin O’rourke & Jeffrey Williamson, 2005. "From Malthus to Ohlin: Trade, Industrialisation and Distribution Since 1500," Journal of Economic Growth, Springer, vol. 10(1), pages 5-34, 01.
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Cited by:

  1. repec:got:cegedp:145 is not listed on IDEAS
  2. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "The Physiological Foundations of the Wealth of Nations," Hannover Economic Papers (HEP) dp-480, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  3. 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.
  4. Holger Strulik, 2014. "Knowledge And Growth In The Very Long Run," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55, pages 459-482, 05.
  5. 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.

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