On Demographic Transition, Structural Change, and Economic Growth and Stagnation
نویسنده
چکیده
The paper analyzes an economy with an agrarian and an industrial sector. Demand is determined by Engel's Law. Population growth follows a non{linear income dependent path according to the theory of demographic transition. In case of decreasing returns to scale in the agrarian sector the existence of a stable low{income equilibrium with high population growth can be shown. If this equilibrium is globally unstable, the system evolves towards a steady{state of perpetual economic growth and low population growth. The path of demographic transition coincides with a path of structural change from an economy specialized in agriculture to a fully industrialized economy. The introduction of an income dependent savings rate allows the interpretation of the low{income equilibrium as a limit cycle and, therefore, the explanation of high uctuations in population growth and per capita income in least developed economies.
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