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The Physiological Foundations of the Wealth of Nations

Autor: Carl-Johan Dalgaard and Holger Strulik
Nummer: 480, Oct 2011, pp. 40
JEL-Class: O11, I12, J13

Abstract:
In the present paper we advance a theory of pre-industrial growth where body size and population size are endogenously determined. Despite the fact that parents invest in both child quantity and productivity enhancing child quality, a take-off does not occur due to a key 'physiological check': if human body size rises, subsistence requirements will increase. This mechanism turns out to be instrumental in explaining why income stagnates near an endogenously determined subsistence boundary. Key predictions of the model are supported by cross-country data.

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