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ECON 3R03 (26)
Jack Leach (26)
Lecture

2013/01/14

3 Pages
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Department
Economics
Course
ECON 3R03
Professor
Jack Leach
Semester
Winter

Description
Course: ECON 3R03 - The History of Economic Growth Section: CO1 Instructor: J. Leach Date: 14-01-13 Malthusian Economics Not many people believe in Malthusian Econ as food supply is outstripping pop growth even today. It made sense in the time of Malthus but with advances in sciences this is no longer the same world. A group of people called “Utopians” thought that govt regulation could make the average guy better off. Malthus thought this was stupid, first thing a better off person would do is have more children, that would drive down wages and therefore the welfare goes back down. Malthus believed it didn’t make the average guy better off but made taxpayers worse off. This view was shared by David Ricardo who was considered the first trade economist. He also coined the iron law of wages: pop growth diminishes wages making the working man worse off. The influence of Malthus extended beyond economics even influencing Darwin and his theory of natural selection. These views may seem extreme but there was a time when they were very realistic. The Malthusian Model Assumption 1 Birth rate rises as income rises, the richer a person is the more they think they can raise a child better. Health and nutrition positively correlated with fertility. 1 Assumption 2 Death rate falls as income rises. Higher income leads to better living conditions and therefore live longer lives. Assumption 3 This is the key assumption: average income falls as population rises. Malthus assumed the fixity of output of agricultural land. Note: You use the 3 assumptions to get the graphs and then you throw them away. You no longer use them in any further analysis. Exogenous: An increas
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