Malthusian Stagnation Research Articles

Speed of convergence in a Malthusian world: Weak or strong homeostasis?

The Malthusian trap is a well recognized source of stagnation in per capita income prior to industrialization. However, previous studies have found mixed evidence about its exact strength. This article contributes to this ongoing debate by estimating the speed of convergence for a panel of 9 preindustrial European economies over a long period of time (14th–18th century). The analysis relies on a calibrated Malthusian model for England and β-convergence regressions. I find evidence of significant differences in the strength of the Malthusian trap between preindustrial European economies. The strongest estimated Malthusian trap is in Sweden, with a half-life of 20 years. The weakest estimated Malthusian trap is in England, with a half-life of about 230 years. This implies that some preindustrial economies were able to experience prolonged variations in their standards of living after a shock, while still being subject to Malthusian stagnation in the long run.

From Malthusian stagnation to modern economic growth: a swarm-intelligence perspective

The correlation between decentralized decision-making and swarm intelligence has emerged as a significant subject within self-organization phenomena. Here, we demonstrate that, if an exponential probability distribution of income emerges in a decentralized economic system, then the total income of all agents can be represented by an aggregate production function, in which the technology factor precisely aligns with the information content inherent in the event of decentralized decision-making by all agents. In particular, for sufficiently large population sizes, the emergence of this technology factor enables the income per capita to increase with the population size, akin to a manifestation of swarm intelligence. More importantly, we find that an exponential probability distribution of income can be generated within a peer-to-peer economy governed by specific game rules, characterizing a decentralized-decision economic system. Building upon this discovery, we propose a swarm-intelligence explanation to elucidate the transition from thousands of years of Malthusian stagnation to modern economic growth.

Malthusian stagnation is efficient

This article studies socially optimal allocations, from the point of view of a benevolent social planner, in environments characterized by fixed resources, endogenous fertility, and full information. Individuals in our environment are fully rational and altruistic toward their descendants. Our model allows for rich heterogeneity of abilities, preferences for children, and costs of raising children. We show that the planner's optimal allocations are efficient in the sense of Golosov et al. (2007). We also show that efficient allocation in the endogenous fertility case differs significantly from its exogenous fertility counterpart. In particular, optimal steady state population is proportional to the amount of fixed resources and the level of technology, while steady state individual consumption is independent of these variables, a sort of “Malthusian stagnation” result. Furthermore, optimal allocations exhibit inequality, differential fertility, random consumption, and a higher population density of poorer individuals even when the planner is fully equalitarian and faces no aggregate risk or frictions.

"Getting Old Before Getting Rich": Origins and Policy Responses in China

The tragedy of history's greatest-scaled Malthusian stagnation—the famine and disorder of mid 20th century China—instigated not only dramatic economic reforms from late 1978, but also unique demographic agendas. Separately China's economic and demographic agendas have received substantial attention in the literature. Although their cointegration appears to have formed a fundamental pillar of China's recent economic development success, that integration has received relatively little attention in the literature. This article elaborates China's long-run economic demography approach to its modernisation agenda and the implications for China's ageing-intensifying development prospects. This contributes to the related academic record and sets out what is prospectively a very informative and useful economic development policy reference point for policymaking in all countries.

Gender empowerment as an enforcer of individuals’ choice between education and fertility: Evidence from 19th century France

Recent theoretical developments in growth models, triggered particularly by unified theories of growth, suggest that the child quantity-quality trade-off is a defining element in our explanation of a transition from Malthusian stagnation to a sustained growth path. This paper presents a model and derives a testable empirical framework to investigate the role of gender in the trade-off between education and fertility for 86 French counties during the 19th century. Endogeneity-mitigated mean- and median-based regressions offer robust empirical predictions for gender-empowered quantity-quality trade-off. In particular, we find the existence of a significant and negative association between education and fertility. Further, while gauging the differential effects of schooling on fertility, we find that the short-run differences between male and female are small whilst the long-run effects are large. From policy perspective, our results imply that for stable long-run growth it matters not just that parents educate their children, but specifically that they choose to educate girls.

China’s Economic Demography Transition Strategy: A Population-Weighted Approach to the Economy and Policy

The first pandemic of the 21st century has brought Pyrrhic attention to one of the era’s greatest mega-trends – population ageing. Today rich countries are disproportionately affected but increasingly the world’s elderly are residents of developing countries. A policy approach that explicitly accounts for the interdependence of economic and demographic change – an economic demography transition approach - has never been more pressing. Thanks partly to the tragedy of history’s greatest Malthusian stagnation, that of mid-20th century China, Chinese policymakers implemented draconian population control measures alongside dramatic economic reforms from around 1980. This paper elaborates China’s consequential and ongoing economic demography transition strategy within the contemporary economic discourse. Amid epochal demographic, public health, and geo-economic change, this economic demography perspective is fundamentally timely, unique and useful for all countries.

Divergence, convergence, and the history-augmented Solow model

We test the recently proposed history-augmented Solow model with respect to its predictions on the evolution of cross-country income inequality between nowadays industrialized countries. Using a broad range of deterministic and stochastic simulations, we illustrate that the model predicts the following pattern. There is low cross-country income inequality before the Industrial Revolution (during the period of “Malthusian Stagnation”), strongly increasing cross-country income inequality afterwards (the period of “The Great Divergence”), and finally declining cross-country income inequality toward a level that is higher than the level before the Industrial Revolution (the period of “Club Convergence”). Tests on the structural break of the observable time series of income dispersion and segmented regressions show that this development is fully consistent with the empirical evolution of cross-country income inequality since the late 19th century. Additional tests using quadratic polynomials, fractional polynomials, polynomial ridge regressions, and polynomial LASSO regressions confirm this finding.

Transition to modern growth in Great Britain: The role of technological progress, adult mortality and factor accumulation

This paper proposes a framework inspired by the Unified Growth Theory and by the literature on structural change to assess the contribution of technology, adult mortality, workforce, and physical and human capital accumulation to the transition from Malthusian stagnation to modern growth. A calibrated version of the model is capable of reproducing the dynamics of Great Britain's (i.e. England, Wales and Scotland) economy during the period 1541–1914, matching both the timing of transition and the pattern of the main macroeconomic and demographic variables. Technological progress emerges as the prime mover until 1850, while thereafter the reduction in adult mortality and factors accumulation play the major role.

Primary education and fertility rates

AbstractUnified growth theory advances that the transition from a Malthusian regime to sustained economic growth is characterized by technological progress and, amongst other things, by an increase in demand for human capital which in turn creates incentives for lower fertility rates. Bearing that in mind, I ask the question: has southern Africa escaped the Malthusian stagnation? Specifically, I study whether primary school completion rates have played any role in total fertility rates in all countries of the Southern African Development Community (SADC) during the 1980–2009 period. Contrary to conventional wisdom, the results, based on dynamic panel time‐series methods, suggest that primary education is associated with lower fertility in the SADC, or that the community is already trading‐off quantity for quality of children. Although I do not claim causality, overall the results are significant because, in accordance with unified growth theory, they suggest that the SADC is experiencing its own transition from the Malthusian stagnation epoch into sustained growth, or that the SADC is going through its own post‐Malthusian regime.

Interpretations of Hyperbolic Growth

Abstract Hyperbolic growth describes the historical economic growth and historical growth of population, but their mechanism remains unexplained. Presented here is a brief survey of attempts to understand hyperbolic growth. Mathematical formulations are in general complicated and there is no clear advantage in using them because they do not give better description of data than the simple, two-parameter hyperbolic formula. They also do not explain the mechanism of growth. The well-known simple formula suggests a simple explanation. Two examples show how two independent investigations were on a brink of making an important and breakthrough discovery and how their potential discovery was thwarted by the established knowledge in demography and in economic research. Researchers who could have used their expertise to suggests new research directions and to advance science were constrained by doctrines, which are widely accepted by faith. Key words: Hyperbolic growth, Mechanism of growth, Population growth, Economic growth, Growth models, Growth theory, Malthusian stagnation JEL: A10, A12, C02, C12, C20, C50, Y80.

Mathematical Analysis of Income Per Capita in the United Kingdom

Abstract. Industrial Revolution did not boost economic growth and the growth of population even in the United Kingdom, the centre of this revolution. On the contrary, from around 1850, economic growth and the growth of population started to be diverted to slower trajectories. The new trend describing the growth of income per capita (Gross Domestic Product per capita, i.e. GDP/cap) is now analysed using Maddison’s data. Two numerical solutions and two analytical solutions of the differential equation describing the growth rate of income per capita are presented. It is demonstrated yet again that even strong fluctuations in the growth rate do not change the shape of growth trajectories. Thus, contrary to the common misconception, even strong fluctuations in the growth rate cannot be used as the evidence of the existence of Malthusian stagnation because they do not change the mechanism of growth. Such strong fluctuations can at best produce only small and negligible ripples in growth trajectories. Our analysis shows also that the current growth of income per capita in the UK follows an unsustainable trajectory. Keywords. United Kingdom, Income per capita, Growth rate, Future growth JEL. A10 , B41, C02, C12, C20, C50, O10 .

Mathematical Analysis of Historical Income Per Capita Distributions

Abstract. Data describing historical growth of income per capita [Gross Domestic Product per capita (GDP/cap)] for the world economic growth and for the growth in Western Europe, Eastern Europe, Asia, former USSR, Africa and Latin America are analysed. They follow closely the linearly-modulated hyperbolic distributions represented by the ratios of hyperbolic distributions obtained by fitting the GDP and population data. Results of this analysis demonstrate that income per capita was increasing monotonically . There was no stagnation and there were no transitions from stagnation to growth. The usually postulated dramatic escapes from the Malthusian trap never happened because there was no trap in the economic growth. Unified Growth Theory is fundamentally incorrect because its central postulates are contradicted repeatedly by data, which were used but never analysed during the formulation of this theory. The large body of readily-available data opens new avenues for the economic and demographic research. They show that certain fundamental postulates revolving around the concept of Malthusian stagnation need to be replaced by the evidence-based interpretations. Within the range of analysable data, which for the growth of population extends down to 10,000 BC, growth of human population and economic growth were hyperbolic. There was no Malthusian stagnation and there were no transitions to distinctly faster trajectories. Industrial Revolution had no impact on changing growth trajectories. Keywords. Economic growth, Income per capita, Unified Growth Theory, Hyperbolic growth, Industrial Revolution, Takeoffs, Malthusian stagnation JEL. A10 , C12, C20, C50, F00.

Unified Growth Theory Contradicted by the Mathematical Analysis of the Historical Growth of Human Population

Abstract. Data describing historical growth of human population, global and regional (Western Europe, Eastern Europe, Asia, former USSR, Africa and Latin America), are analysed. Results are in harmony with the earlier analysis of the historical growth of the world population in the past 12,000 years and with other independent studies. This analysis is also in harmony with the study of the historical economic growth. Within the range of analysable data, there was no Malthusian stagnation. Takeoffs from stagnation to growth, postulated by the Unified Growth Theory never happened. There were no escapes from the Malthusian trap because there was no trap in the growth of population. This analysis and the earlier studies of the Gross Domestic Product lead to the conclusion that there were also no takeoffs in the income per capita distributions, claimed by the Unified Growth Theory. Consequently, the claimed differential timing in takeoffs never happened. Unified Growth Theory is contradicted yet again by the mathematical analysis of the same data, which were used, but never analysed, during the formulation of this theory. The study presented here, as well as earlier publications on the related topics, shows also that certain fundamental postulates used in the economic and demographic research are repeatedly contradicted by the mathematical analysis of data. Keywords. Population growth, Economic growth, Unified Growth Theory, Regimes of growth, Malthusian trap, Gross Domestic Product, Income per capita, Hyperbolic growth. JEL. A10, A12, B41, C50, F00, F01, Y80.

Demographic Transition Theory and Its Link to the Historical Economic Growth

Abstract. In the absence of convincing evidence, data for Sweden and Mauritius are used in academic publications to illustrate the Demographic Transition Theory. These data are closely examined and found to be in clear contradiction of this theory. Demographic Transition Theory is also contradicted by the best available data for England. Other examples of contradicting evidence are also discussed. Keywords. Population growth, Economic growth, Malthusian stagnation, Unified Growth Theory, Demographic Growth Theory, Stages of growth. JEL. A12, A20, B10, C50, Y80.

Unified Growth Theory Contradicted by the Absence of Takeoffs in the Gross Domestic Product

Abstract. Data describing historical economic growth are analysed. They demonstrate convincingly that the take offs from stagnation to growth, claimed in the Unified Growth Theory, never happened. This theory is again contradicted by the same data which were used, but never properly analysed, during its formulation. The absence of the claimed takeoffs demonstrates that the postulate of the differential takeoffs is also contradicted by data. Furthermore, this analysis demonstrates that the mathematically-analysable data contradict the concept of the prolonged Malthusian stagnation, its effects on the economic growth as well as the concept of a dramatic escape from the Malthusian trap. Keywords. Historical economic growth, regimes of growth, Malthusian stagnation, takeoffs, Malthusian trap, hyperbolic growth. JEL. A10, B10, B22, F01, N10.

British economic growth, 1270-1870

This is a definitive new account of Britain's economic evolution from a backwater of Europe in 1270 to the hub of the global economy in 1870. A team of leading economic historians reconstruct Britain's national accounts for the first time right back into the thirteenth century to show what really happened quantitatively during the centuries leading up to the Industrial Revolution. Contrary to traditional views of the earlier period as one of Malthusian stagnation, they reveal how the transition to modern economic growth built on the earlier foundations of a persistent upward trend in GDP per capita which doubled between 1270 and 1700. Featuring comprehensive estimates of population, land use, agricultural production, industrial and service-sector production and GDP per capita, as well as analysis of their implications, this will be an essential reference for anyone interested in British economic history and the origins of modern economic growth more generally.

Agricultural Sector Development and Structural Transformation: Sub-Saharan Africa versus East Asia

This study examines the nature of economic stagnation in the majority of the countries in Sub-Saharan Africa (SSA) and discusses different approaches to structural transformation of their traditional agriculture-based economies. The argument is that the economies and people of SSA countries suffer from a Malthusian stagnation and poverty. This study attributes the Malthusian stagnation to underutilization of the richly endowed and other agricultural resources, which in turn is due to the prevalence of communal ownership of land in rural areas. It argues that the traditional institution has kept agricultural productivity at extremely low levels and prevented a demographic dividend from being created. This study reviews the experiences of East Asian and other countries in their early stage of economic development along with those of SSA to understand the process of an economic takeoff. From this emerges the importance of broad-based agricultural development in enabling a traditional agriculture-based economy to get prepared for the takeoff. In particular, it turns out that internalizing the external effects of agricultural development on human development and its effects on savings is the key. It also finds supportive evidences from panel-data analyses of the dynamic driving forces in different stages of economic development.

Malthus and the Industrial Revolution: Evidence from a Time-Varying VAR

In the process of economic development economies grow through various regimes, each characterized by different demographic-economic interactions. The changes in these interactions are key elements in different explanations of the escape from Malthusian stagnation. We employ time-varying vector autoregressions, an approach that allows tracking this transition for England in the period between 1541 and 1870. The empirical findings suggest that the link between real wages and population growth was at work until the 19th century. Furthermore, we document changes in the propagation mechanism from real wages on population growth over time that feature prominently in Unified Growth Theory. Most remarkably, in contrast to earlier empirical literature we find strong effects of income on mortality after the 1750s.

Malthus in cointegration space: evidence of a post-Malthusian pre-industrial England

This paper re-examines the interaction between population growth and income per capita in pre-industrial England. Our results suggest that, as early as two centuries preceding the Industrial Revolution, England had already escaped the Malthusian Epoch and entered a post-Malthusian regime, where income per capita continued to spur population growth but was no longer stagnant. Our formulation of a post-Malthusian hypothesis implies cointegration between vital rates (birth- and death rates) and income and builds explicitly on a simple model of Malthusian stagnation. We show that this hypothesis can be interpreted as an extension of the latter model where the negative Malthusian feedback effect from population on income, as implied by diminishing returns to labor, is offset by a positive Boserupian and/or Smithian scale effect of population on technology.

ECONOMIC GROWTH AND EVOLUTION: PARENTAL PREFERENCE FOR QUALITY AND QUANTITY OF OFFSPRING

This paper presents a quantitative analysis of the model developed by Galor and Moav [Galor, Oded and Omer Moav (2002) Natural selection and the origin of economic growth.Quarterly Journal of Economics117(4), 1133–1191] in which agents vary genetically in their preference for quality and quantity of children. The simulation produces a pattern of income and population growth that resembles the period of Malthusian stagnation before the Industrial Revolution and the take-off into a modern growth era. We also investigate the stability of the modern growth era as an absorbing state of the model under the introduction of a strongly quantity-preferring genotype. We show that, given the absence of a scale effect of population in the model, the economy can regress to a Malthusian state under this change in the initial distribution of genotypes.