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Unformatted text preview: al per worker on an individual level ii. People with little or no collateral, are given access to credit through “solidarity lending” III. Chapter 4: Population a. Malthusian Model i. Describes population growth prior to ~1800 ii. As income increases people will have more children 1. This assumption breaks down in modern “developed” nations iii. Increases in population result in decreases capital per person and therefore decreases in income per person. b. Solow Model and Population i. Capital Dilution – more people means less capital per person ii. Steady State 1. Δk = 0 ⇒ δk ss = γ ⋅ y (k ss ) iii. Increases in the population growth rate result in lower steady state output per person c. Mortality Transition: Increases in Life Expectancy => Increasing Pop. Growth i. Increase in income per capita ii. Increase in food stability iii. Improved public health and medical practices d. Fertility Transition: Decreases in Fertility => Decreasing Pop. Growth i. Reduction in C...
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- Summer '08