Chapter11_Population_022409

Chapter11_Population_022409 - Population and Economic...

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Population and Economic Growth Duke University and Federal Reserve Bank of Atlanta February 24, 2009 Population and Economic Growth February 24, 2009 1 / 21
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Population and Economic Growth So far, we have assumed population is exogenously given. However, fertility and mortality are endogenous variables. We already saw how changes in population have impact on economic growth. Population and Economic Growth February 24, 2009 2 / 21
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A Malthusian Model Robert Malthus, An Essay on the Principle of Population , 1798. Simple yet powerful model of the relation between population and economic growth. Good description of the evidence of humanity until around 1800. Remember the evidence. Good description of the natural economy of animals. Juan Rubio-Ram±rez (DUKE) Population and Economic Growth February 24, 2009 3 / 21
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World Income and Population: Data Population and Economic Growth February 24, 2009 4 / 21
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Production Function Production function: Y ( t ) = AX ( t ) β L ( t ) 1 β where X ( t ) is land. More general form: Y ( t ) = AX ( t ) β K ( t ) α L ( t ) 1 α β The only important feature is that we have a non-reproducible input. Why not capital? 1 Little importance before XIXth century. 2 Juan Rubio-Ram±rez (DUKE) Population and Economic Growth February 24, 2009 5 / 21
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Per Capita Production Function In per capita terms: y = Ax β where x = X / L . Taking logs and derivatives with respect to time: ˙ y y = β ˙ L L where we have assumed that A and X are constant over time. Interpretation: negative relation between population and income per capita. Limitations: Inada conditions may not hold (for example, because of minimum size requirements). Population and Economic Growth February 24, 2009 6 / 21
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Law of motion: ˙ L L = f m where f is the fertility rate and m is the mortality rate. Fertility rate:
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This note was uploaded on 05/13/2010 for the course ECON 110D taught by Professor Schmitt-grohe during the Spring '08 term at Duke.

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Chapter11_Population_022409 - Population and Economic...

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