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Economic Growth and Stagnation with Endogenous Health and Fertility

  • Holger Strulik


This article offers a theory of economic growth, stagnation, and demo-economic transition that originates from external effects of child-bearing, health expenditure, and education under endogenous mortality. Facing a hierarchy of needs, parents always consume and want to have a family. Child quality, measured as a two-dimensional vector of child health and schooling, becomes only affordable when uncontrollable mortality is sufficiently low. Child quality expenditure initiates an economic take-off and convergence towards perpetual growth while its absence may cause convergence towards an equilibrium of economic stagnation and high fertility. This way, the article provides an explanation for diverging growth rates from a cross-country perspective.

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Paper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 20208.

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Date of creation: Aug 2002
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Handle: RePEc:ham:qmwops:20208
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  1. Angus Deaton, 2002. "Health, inequality, and economic development," Working Papers 270, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  3. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
  4. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, 06.
  5. 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.
  6. Oded Galor & David N. Weil, 1998. "Population, Technology, and Growth: From the Malthusian Regime to the Demographic Transition," Working Papers 98-1, Brown University, Department of Economics, revised 19 Aug 1998.
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  8. anonymous, 1995. "Growth continues for Florida," Regional Update, Federal Reserve Bank of Atlanta, issue Oct, pages 8-10.
  9. Tamura, Robert, 1994. "Fertility, Human Capital and the Wealth of Families," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(4), pages 593-603, May.
  10. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-44, August.
  11. Oded Galor & David N. Weil, 1998. "Population, Technology, and Growth: From the Malthusian Regime to the Demographic Transition and Beyond," NBER Working Papers 6811, National Bureau of Economic Research, Inc.
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  13. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
  14. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 207-296.
  15. Alessandro Cigno, 1998. "Fertility decisions when infant survival is endogenous," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(1), pages 21-28.
  16. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-40, January.
  17. John Luke Gallup & Jeffrey D. Sachs & Andrew D. Mellinger, 1998. "Geography and Economic Development," NBER Working Papers 6849, National Bureau of Economic Research, Inc.
  18. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
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