Class notes
Lecture notes for week 9 - Unit 2(ECO2004)
- Course
- ECO2004S (ECO2004)
- Institution
- University Of Cape Town (UCT)
Summary of the lecture notes for week 9 for macroeconomics
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ECO2004LMACROECONOMICS II
Unit 2 10
CHAPTER
Technology, Population
THE FACTS and Growth
OF GROWTH
Refilwe Lepelle
1
Key questions
• What is the Malthusian trap?
• What led to the Industrial Revolution in the 18th century?
• What do firms consider when making decisions about
production?
• What were the incentives for innovation before the Industrial
Revolution?
• Why did the Industrial Revolution begin in Britain in the 18th
century? What is Malthusian Economics?
2
, What we will cover
1
Malthusian Trap
2
Industrial Revolution
3
Economic Models
4a
Technology and Costs
4
Modelling a Dynamic Economy
4b
Innovation and Profit
5
Incentives for Innovation
6
Malthusian Economics
3
Malthusian Trap
4
, Economic Growth
Growth in real wages started in the 18th century.
5
Malthusian Trap
Thomas Robert Malthus (1798) “An Essay on the Principle of
Population”
• From the 1200 – 1700 there was essentially no significant growth
of output (income) per person in Europe.
• Agriculture was the main sector and had very little improvements
in technology.
• There was some output growth BUT this was proportional to the
increase in population which led to constant income per person –
subsistence level.
• Europe was in a Malthusian trap – unable to increase its income
per person.
• The proportional increase in output and population was not a
coincidence.
output = mortality rates = population
6
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