A model on the escape from the Malthusian trap

Abstract.

We consider a demoeconomic model where output is produced using physical capital, human capital and technology as inputs. Human capital depends on the number of people and the level of education in the economy. The dynamics of labour, physical capital, education and technology are endogenously determined such as to reflect the interdependence between economic and demographic factors. The longrun path of the economy and in particular the possibility to escape the Malthusian trap crucially depend on technological progress, which provides for economy wide increasing returns to scale. The build up of technology is positively related to the stock of human capital. Our model predicts that positive population growth is sufficient to escape the Malthusian trap.