From Malthusian Stagnation To Balanced Growth: United Growth Model

From a long run view, only a few countries have been stepping on the sustainable growth path while the others have still strugled for escaoping stagnation. That means, however, economic growth isn't unrolling in the world and it has witnessed the expanding of distance between the poorest and richest in the world. What caused this arosed more scholars'interest in peering the mechanisim of long-run growth which are discussed in the growth theory field as well as development theory field. As Lucas(1988) argued,"so many welfare are involed in such questions so that you can never moved out when you begin to think of it."Traditional research divided the long-run growth into two phases: Malthusian stagnation and modern growth and thus take more attention to the escaping from Malthusian stagnation to modern growth. Such a division has somehow taken the industrial revolution to a technological breakthrough rather than a progressive process and therefore its theoretical model need exogenous shock to modeling the escaping process.However, existing historical data showed that process gradually and endogenously prograssed in long term no matter how rapidly was the escaping from Malthusian stagnation to modern growth. New growth theory can successfully explained the modern growth stage while has no significancs to stagnation stage; those theoretical model constructed with stangdard growth theory and integrated some significance from development in it can provides some insights to the structural transition but have provided no united view to long-run growth theory. So, Galor and Weil proposed division of 3 stages and tried to constructed united model to explain the long-term growth economic growth, which is a challenging work and needed the innovation of methodology.According to historical economic data, we found the long-term economic growth process of the world can be divided into stagnation stage, slow growth stage, high growth stage and balanced growth stage. This paper, with the enlightenment from Galor and Weil's works done, modeled those four stages endogenously in a long-term run growth framework which could finished structural transition and demographic transition in it, i.e. such a model has combined the core issue of growth theory and development theory into one long-term endogenouse growth framework.This dissertation, based on the G-W model, constructed a economic model with agricultural sector and non- agricultural sector. It firstly analyzed the education level chosen by parents and then come to evolution of education level and its threshold. Then it turned to the united evolution of population scale, education level, and technological progress rate. With the conclusion obtained, the dissertation discussed the demographic change mainly against education level, the structural change mainly against technology. Furthermore, it discussed the long-run growth and the hump-shaped fact. Along with this technological routine, the dissertation was organized as follow.Chapter 1 offered an introduction to this research. Based on the long-run historical data of word economy'growth, we discussed the Malthusian Stagnation, Kuznets'Facts, Kaldor's Facts, Demographic Transition and Hump-Shaped fact and pointed out that the traditional 2-stage view of long-run growth process was somehow not exact and so the 4-stage would be more useful. Based on these discussions, it came to conclude the research issue of this dissertation.Chapter 2 offered a literature review. In this chapter, we checked the existing research with the mainstream of New Growth Theory and emphasized on the merging of development theory and growth theory with comments and critics. At last, we discussed the G-W model especially in its theoretical contribution and its imperfection.Chapter 3 constructed a united growth model. In this chapter, we take over the phenomenon of G-W model to construct an over-lapping endogenous economic growth model with agricultural sector and non-agricultural sector and thus constructed the framework for further analysis.Chapter 4 takes great deal to education evolution of the model congstructed. This chapter firstly dealt with the value of education with the historical data of Japan and the Great British to show the role of education in economic growth. Then it came to discuss the relation between education and income, the threshold condition of education investment and the influence of technological progress. At the end, the upper bound of education level was discussed.Chapter 5 mainly discussed the evolution of technology in model economy. Beginning with the history of technology change, this chapter argued the technological change emerging in so called industrial revolution was such a slowly changed process rather than a revolution in its natural meaning. In the view of slow long-lasting change of technology, it talked about the momentum of technology change and evolution and then analyzed the united evolution of population, education and technological progress rate.Chapter 6 mainly discussed the demographic growth and transition of the model economy. With long-term historical data of population, This chapter argued the methodology of demographic research and discussed the stagnation of population in model economy and its stability. Then it found the threshold condition of population growth and analyzed the process of it. Based on the growth rate, this chapter attaches more importance to the sustainable growth and come to the conclusion of endogenously demographic change in model economy.Chapter 7 mainly discussed the structural change of the model economy. With the introduction of the research works by Kuznets, this chapter recalled the source of structural change and reviewed the existing modeling works of three paths. Then it turned to discuss structural change of this model economy based on chapter 3 and chapter 4 and come to the relation between agricultural sector and non-agricultural sector. As a result, it found the support of non-agricultural sector to agricultural sector played an important role in the growth of model economy. At the end, it discussed the issue of the price between agricultural goods and non-agricultural goods when it lost balance.Chapter 8 discussed the long-term growth and the hump-shaped fact question. Beginning with the dilemma faced respectively by growth theory and development theory, this chapter explored the neo-classical character of New Growth Theory and thus argued the necessity of constructing the United Growth Model. Then it turned to the discussion on the long-term growth and hump-shaped fact from a view of growth rate.Chapter 9 briefly reviewed the long-term growth model constructed in this paper and pointed out that the main innovation of this paper referred to the long-run growth model constructed which could endogenously discuss the structural change, demographic change and long-run growth as well and therefore integrated the development theory into growth theory to some extent. Based on this, end of this chapter were argued the deficiency of the model constructed and the following research from three directions.The main innovation of this paper referred to the long-run growth model constructed which could endogenously discuss the structural change, demographic change and long-run growth as well and therefore integrated the development theory into growth theory to some extent. The second innovation lied in the first discussion of the support of industrial sector to agricultural sector in a long-term growth model. The discussion of the price difference between industrial sector to agricultural sector and thus the conclusion obtained should be mentioned as another one innovation in this paper which would never discussed in existing model.