The Determinants of Subsistence Income in a Malthusian World
This study constructs a simple, two-sector Malthusian model with agriculture and industry, and use it to identify the determinants of subsistence income. We make standard assumptions about preferences and production technology, but by contrast to existing studies we assume that children and other consumption goods are gross substitutes. Consistent with the traditional Malthusian model, we nd that productivity growth in agriculture has no e ect on subsistence income. More importantly, we also nd that subsistence income increases, not just with the death rate as has recently been demonstrated in the literature, but also with productivity in manufacturing.
|Date of creation:||Jul 2009|
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- Quamrul Ashraf & Oded Galor, 2010. "Dynamics and Stagnation in the Malthusian Epoch," Department of Economics Working Papers 2010-01, Department of Economics, Williams College, revised May 2011.
- Quamrul Ashraf & Oded Galor, 2008. "Dynamics and Stagnation in the Malthusain Epoch: Theory and Evidence," Working Papers 2008-14, Brown University, Department of Economics.
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