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Figure 6.10 Adjustment to the Steady State in the Malthusian Model When z Increases
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Figure 6.7 The Per-Worker Production Function
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Figure 6.8 Determination of the Steady State in the Malthusian Model
6-4
Real Per Capita Income and the Investment Rate
Across countries, real per capita income and the investment rate are positively correlated.
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• There is no tendency for rich countries to grow faster than poor countries, and vice-versa. • Rich countries are more alike in terms of rates of growth than are poor countries.
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An increase in z in the Malthusian model
• If z increases, this shifts up the per-worker production function. • In the long run, the population increases to the point where per capita consumption returns to its initial level. • There is no long-run change in living standards.
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Figure 6.9 The Effect of an Increase in z in the Malthusian Model
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Equation 6.4: Equilibrium evolution of the population
This equation describes how the future population depends on current population.
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Chapter 6
Economic Growth: Malthus and Solow
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Chapter 6 Topics
• • • • Economic growth facts Malthusian model of economic growth Solow growth model Growth accounting
Population Control in the Malthusian Model
• Population control alters the relationship between population growth and per-capita consumption. • In the long run, per capita consumption increases, and living standards rise.
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Equation 6.8
Population growth is increasing in consumption per worker, c
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Equation 6.1: Production Function
Output is produced from land and labor inputs.
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Figure 6.1 Natural Log of Real PerCapita Income in the United States, 1869–2005
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Equation 6.6: The per-worker production function
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Equation 6.7: Equilibrium condition in per-worker form
Across countries, real per capita income and the population growth rate are negatively correlated.
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6-2
U.S. Per Capita Income Growth
In the United States, growth in per capita income has not strayed far from 2% per year (excepting the Great Depression and World War II) since 1900.
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Figure 6.5 Population Growth Depends on Consumption per Worker in the Malthusian Model
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Equation 6.2: Evolution of the population
Population growth is higher the higher is percapita consumption.
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Figure 6.11 Population Control in the Malthusian Model
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Equation 6.3: Equilibrium Condition
In equilibrium, consumption equals output produced.
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Figure 6.2 Real Income Per Capita vs. Investment Rate
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Real per capita income and the rate of population growth
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6-10
A Malthusian Model of Economic Growth