Presentation is loading. Please wait.

Presentation is loading. Please wait.

Economic Growth, Population, and Human Capital

Similar presentations


Presentation on theme: "Economic Growth, Population, and Human Capital"— Presentation transcript:

1 Economic Growth, Population, and Human Capital
June 4, 2005 Beijing, China China Center for Economic Research Gary S. Becker University of Chicago

2 GDP per Capita China, France, Japan, Germany, United Kingdom and United States 1820 - 2000
Source: Madison, Angus. The World Economy: Historical Statistics. OECD, 2003.

3 Gross School Enrolment in Secondary and Tertiary Education China 1990, 2001
Secondary Education 48.7 67.2 Tertiary Education 2.9 12.7 Source: World Development Indicators, The World Bank.

4 The China/West European Dichotomy 1–2001 AD
Population (millions) Per Capita GDP (1990 int. $) GDP (billions 1990 int. $) China West Europe 1 59.6 24.7 450 26.8 11.1 1000 59 25.4 400 26.6 10.2 1300 100 58.4 600 593 60 34.6 1400 72 41.5 676 43.2 28.1 1500 103 57.3 771 61.8 44.2 1820 381 133 1,204 228.6 160.1 1913 437.1 261 552 3,458 241.3 902.3 1950 546.8 304.9 439 4,579 239.9 1,396.2 2001 1,275.4 392.1 3,583 19,256 4,569.8 7,550.3 Source: Madison, Angus. The World Economy: Historical Statistics. OECD, 2003.

5 Malthusian Economy D D’ Income per Capita S I* S D’ D Population N* N’
Population Growth

6 Malthusian Model ln n(t) = a + b ln w(t) ln w(t) = α - β ln N(t) SS: ln n(t) = 0, n* = 1 ln w* = - a/b ln N* = α/β + a/(bβ) Dynamics ln n(t) = ln N(t+1) – ln N(t) = a + b ln w(t) ... ln N(t+1) = a + bα + (1 – bβ) ln N(t) Since, b, β > 0, 1 – bβ < 1 Stable, although requires also bβ < 2 β << 1, so sufficient if b < 2

7 Total Fertility Rate China, England and Wales, France, Japan, Sweden and United States 1800 - 2000
Sources: Chesnais, Jean Claude. The Demographic Transition. Oxford: Oxford University Press, World Development Indicators, World Bank, The Reader's companion to American history

8 Fertility Rates for Nations with below Replacement Fertility 1970 – 2000
Source: World Development Indicators, The World Bank.

9 Knowledge Revolution: Modern Economy
Per Capita Income Growth (ΔI) D ΔI’ S ΔI* D S Population N* N’ Population Growth

10 Modern Model p(t) = ln [N(t+1)/N(t)] = a – b ln[I(t+1)/I(t)] + c(I(t)) ln I(t) with c(I) → 0 as I → ∞ ln[I(t+1)/I(t)] = α + β ln N(t) + γ ln I(t) if γ = 0, SS: p(t) = p* = 0 ln [I(t+1)/I(t)] = g* = a/b ln N* = (a/bβ) – (α/β) if γ ≠ 0, differentiate growth equation at SS 0 = β p* + γ g* or p* = - γ g*/β < 0 as γ g* > 0 = 0 as γ g* = 0 > 0 as γ g* < 0 a – b g* = p*, or g* = a / (b - γ/β)

11 Stability of Growth ln N(t+1) – ln N(t) = a – b [α + β ln N(t) + γ ln I(t)] + c ln I(t) ln N(t+1) = ln N(t) = a – b α + (1-bβ) ln N(t) + (c-bγ) ln I(t) if c > bγ, force raising population over time if c = γ ≈ 0 Stability bβ > 0, same as Malthusian although now have growth in income and change over time in population


Download ppt "Economic Growth, Population, and Human Capital"

Similar presentations


Ads by Google