DP2485 Agricultural Productivity Growth and Escape from the Malthusian Trap

Author(s): Alexia Fürnkranz-Prskawetz, Tomas Kögel
Publication Date: June 2000
Keyword(s): Economic Growth, Fertility Choice, Malthusian trap, Technological Change
JEL(s): J11, O11, O40
Programme Areas: International Macroeconomics, Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2485

Industrialization allowed the industrialized world of today to escape from a regime characterized by low economic and population growth and to enter a regime of high economic and population growth. To explain this transition, we construct a two-sector growth model with endogenous fertility and endogenous technological progress in the manufacturing sector. With this structure our model is able to replicate the stylized facts of the British industrial revolution. In addition, we show that industrialization requires rising growth of agricultural total factor productivity. This result is in marked contrast to previous work within a similar framework - but with a constant population - which came to the conclusion that industrialization requires merely a rising level of agricultural total factor productivity.