ENTERTAINING MALTHUS: BREAD,CIRCUSES, AND ECONOMIC GROWTH |
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| Authors: | Rohan Dutta David K Levine Nicholas W Papageorge Lemin Wu |
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| Institution: | 1. +1 514 398 5611+1 514 398 5611;2. Assistant Professor, Department of Economics, McGill University, Montreal, Quebec H3A2T7, Canada;3. +39 055 468 5954+39 055 468 5954;4. Joint Chair Economics and RSCAS, Department of Economics, European University Institute, San Domenico, Fiesole 50014, Italy;5. Department of Economics, European University Institute and Washington University in St. Louis, St. Louis, MO 63130;6. 410 516 4938410 516 7600;7. Broadus Mitchell Assistant Professor, Department of Economics, Johns Hopkins University, Baltimore, MD 21218;8. First Version: June 20, 2013. We are grateful to NSF Grant SES‐08‐51315 for financial support. For helpful comments, we thank George Akerlof, Francisco Alvarez‐Cuadrado, Pranab Bardhan, Gregory Clark, Bradford DeLong, Jan De Vries, Barry Eichengreen, Hülya Eraslan, Mukesh Eswaran, Ali Khan, Ronald Lee, Peter Lindert, Salvatore Modica, Martha Olney, Gerard Roland, and Yingyi Qian along with seminar participants at UC Berkeley, UC Davis, McGill University, Peking University, and Tsinghua University and members of the Monday Reading Group at Washington University in St. Louis. The authors would also like to acknowledge that a similar paper by one of the authors (Wu ) was begun independently and in parallel to the current paper. In that paper, as in this one, a two‐sector model is studied where welfare can be considerably higher than subsistence despite a Malthusian constraint. |
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| Abstract: | Motivated by the basic adage that man does not live by bread alone, we offer a theory of historical economic growth and population dynamics where human beings need food to survive, but enjoy other things, too. Our model imposes a Malthusian constraint on food, but introduces a second good to the analysis that affects living standards without affecting population growth. We show that technological change does a good job explaining historical consumption patterns and population dynamics, including the Neolithic Revolution, the Industrial Revolution, and the Great Divergence. Our theory stands in contrast to models that assume a single composite good and a Malthusian constraint. These models generate negligible growth prior to the Industrial Revolution. However, recent revisions to historical data show that historical living standards—though obviously much lower than today's—varied over time and space much more than previously thought. These revisions include updates to Maddison's dataset, which served as the basis for many papers taking long‐run stagnation as a point of departure. This new evidence suggests that the assumption of long‐run stagnation is problematic. Our model shows that when we give theoretical accounting of these new observations the Industrial Revolution is much less puzzling. (JEL B10, I31, J1, N1, O30) |
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