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On demographic transition, structural change, and economic growth and stagnation

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  • Holger Strulik

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.

Suggested Citation

  • Holger Strulik, 2000. "On demographic transition, structural change, and economic growth and stagnation," Mathematical Population Studies, Taylor & Francis Journals, vol. 8(4), pages 333-356.
    • Handle: RePEc:taf:mpopst:v:8:y:2000:i:4:p:333-356
    DOI: 10.1080/08898480009525490
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    References listed on IDEAS

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    1. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
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    More about this item

    Keywords

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    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, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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