Phelps' technical progress model generalized

Population growth and economic development in the very long run: a simulation model of three revolutions

The authors propose an economic model capable of simulating the 4 main historical stages of civilization: hunting, agricultural, industrial, and postindustrial. An output-maximizing society to respond to changes in factor endowments by switching technologies. Changes in factor proportions arise through population growth and capital accumulation. A slow rate of exogenous technical process is assumed. The model synthesizes Malthusian and Boserupian notions of the effect of population growth on per capita output. Initially the capital-diluting effect of population growth dominates. As population density increases, however, and a threshold is reached, the Boserupian effect becomes crucial, and a technological revolution occurs. The cycle is thereafter repeated. After the second economic revolution, however, the Malthusian constraint dissolves permanently, as population growth can continue without being constrained by diminishing returns to labor. By synthesizing Malthusian and Boserupian notions, the model is able to capture the salient features of economic development in the very long run.