No. 4/2003
GROWTH, DEVELOPMENT AND LAND-USE IN A SIMPLE AGRARIAN ECONOMY WITH ENDOGENEOUS
POPULATION
Anders Skonhoft
Jan Tore Solstad
Abstract:
The paper analyses the relation between demographic transformation, agricultural
transformation and land-use pressure within a simple agrarian economy
where population is treated both as a cause and consequence of economic
changes. In this Malthusian-type of economy, population growth and food
production are interrelated through two production activities. First,
agricultural land and labour are tied up in production of agricultural
products determining the current flow of consumption. Secondly, labour
is used for converting the natural resource base in the form of wilderness,
land into agricultural land. It is demonstrated that the economy can run
into a poverty trap equilibrium which is the typical Malthusian
situation. Alternatively, the equilibrium can be of a high income per
capita type. Increasing returns to scale in food production together with
an increasing amount of agricultural land, are the crucial factors behind
this outcome. As increasing return to scale can be interpreted as if induced
innovations take place, and can be seen in light of the presence of Boserup
growth mechanisms.
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