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The Galor-Weil Model Revisited: A Quantitative Exercise

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  • Nils-Petter Lagerlöf

    (York University)

Abstract

Abstract: The long-run growth model of Galor and Weil (AER 2000) is examined quantitatively. We first give parametric forms to some functions which were only given on general form in the original article. We then choose numerical parameter values in line with calibrations of related long-run growth models, and with data. Finally, we simulate the model. We find, inter alia, that the time paths for population, and other variables, display oscillatory behavior: they move in endogenous cycles. As the economy transits from Malthusian stagnation to modern growth these oscillations die out. This is consistent with population growth rates fluctuating considerably in historical data, but having stabilized in modern economies. We also show that these cycles are not an artifact of the two-period life setting: allowing adults to live on after the second period of life with some probability does not make the oscillations go away. Rather, the cycles are driven by fertility being proportional to per-capita income minus the parental subsistence requirement. When population is large, and per-capita incomes close to subsistence, fertility is therefore sensitive to changes in population levels. (Copyright: Elsevier)

Suggested Citation

  • Nils-Petter Lagerlöf, 2006. "The Galor-Weil Model Revisited: A Quantitative Exercise," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(1), pages 116-142, January.
  • Handle: RePEc:red:issued:v:9:y:2006:i:1:p:116-142 DOI: 10.1016/j.red.2005.07.002
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    References listed on IDEAS

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    Cited by:

    1. David Croix & Davide Dottori, 2008. "Easter Island’s collapse: a tale of a population race," Journal of Economic Growth, Springer, vol. 13(1), pages 27-55, March.
    2. Ashraf, Quamrul & Galor, Oded, 2007. "Cultural Assimilation, Cultural Diffusion and the Origin of the Wealth of Nations," CEPR Discussion Papers 6444, C.E.P.R. Discussion Papers.
    3. Quamrul Ashraf & Oded Galor, 2011. "Dynamics and Stagnation in the Malthusian Epoch," American Economic Review, American Economic Association, pages 2003-2041.
    4. Schäfer, Andreas & Valente, Simone, 2011. "Habit Formation, Dynastic Altruism, And Population Dynamics," Macroeconomic Dynamics, Cambridge University Press, pages 365-397.
    5. Joel Mokyr & Hans-Joachim Voth, 2012. "Understanding Growth in Europe, 1700–1870: Theory and Evidence," Journal of Economic Sociology, National Research University Higher School of Economics, vol. 13(5), pages 57-102.
    6. Raouf Boucekkine & David de la Croix & Dominique Peeters, 2007. "Early Literacy Achievements, Population Density, and the Transition to Modern Growth," Journal of the European Economic Association, MIT Press, vol. 5(1), pages 183-226, March.
    7. Collins, Jason & Baer, Boris & Weber, Ernst Juerg, 2014. "Economic Growth And Evolution: Parental Preference For Quality And Quantity Of Offspring," Macroeconomic Dynamics, Cambridge University Press, vol. 18(08), pages 1773-1796, December.
    8. Thomson, Henry, 2013. "The Impact of Agriculture and Farm Produce Prices on Human Capital Formation: Education Decisions of Young Americans in Agricultural Areas Before and During the Food Crisis 2000-2010," Master's Theses 148745, University of Minnesota, Department of Applied Economics.
    9. Matthias Doepke & Moshe Hazan & Yishay D. Maoz, 2015. "The Baby Boom and World War II: A Macroeconomic Analysis," Review of Economic Studies, Oxford University Press, pages 1031-1073.
    10. Elgin, Ceyhun, 2012. "A Theory Of Economic Development With Endogenous Fertility," Macroeconomic Dynamics, Cambridge University Press, vol. 16(05), pages 686-705, November.
    11. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Review of Economic Studies, Oxford University Press, pages 1143-1179.
    12. Gonçola Monteiro & Alvaro Pereira, 2006. "From Growth Spurts to Sustained Growth," Discussion Papers 06/24, Department of Economics, University of York.
    13. Sara LaLumia & James Sallee, 2013. "The value of honesty: empirical estimates from the case of the missing children," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(2), pages 192-224, April.
    14. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," Review of Economic Studies, Oxford University Press, vol. 76(1), pages 143-179.
    15. Masako Kimura & Daishin Yasui, 2012. "Public Policy and the Income-Fertility Relationship in Economic Development," KIER Working Papers 834, Kyoto University, Institute of Economic Research.
    16. Michael Bar & Oksana Leukhina, 2010. "Demographic Transition and Industrial Revolution: A Macroeconomic Investigation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(2), pages 424-451, April.
    17. Oded Galor & Omer Moav & Dietrich Vollrath, 2006. "Inequality in Land Ownership, the Emergence of Human Capital Promoting Institutions, and Great Divergence," Working Papers 2006-14, Brown University, Department of Economics.
    18. Desmet, Klaus & Parente, Stephen, 2009. "The Evolution of Markets and the Revolution of Industry: A Quantitative Model of England's Development, 1300-2000," CEPR Discussion Papers 7290, C.E.P.R. Discussion Papers.
    19. Nico Voigtländer & Hans-Joachim Voth, 2006. "Why England? Demographic factors, structural change and physical capital accumulation during the Industrial Revolution," Journal of Economic Growth, Springer, vol. 11(4), pages 319-361, December.
    20. William Lord & Peter Rangazas, 2006. "Fertility and development: the roles of schooling and family production," Journal of Economic Growth, Springer, vol. 11(3), pages 229-261, September.
    21. Raluca Iorgulescu, 2015. "Human Capital, The Digital Divide, And The Possible Connection To The Flow-Fund Analysis Of Socioeconomic Metabolism," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 5-16, January.

    More about this item

    Keywords

    Mathusian; Long-Run Growth; Galor-Weil Model;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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