Working Paper: CEPR ID: DP5454
Authors: Shekhar Aiyar; Carl-Johan Dalgaard; Omer Moav
Abstract: This paper offers micro-foundations for the dynamic relationship between technology and population in the pre-industrial world, accounting for both technological progress and the hitherto neglected but common phenomenon of technological regress. A growing population engenders the endogenous adoption of new techniques that increase the division of labour. Conversely, technological progress supports an increasing population in the Malthusian environment. A transient shock to population or productivity, however, induces the neglect of some techniques rendered temporarily unprofitable, which are therefore not transmitted to the next generation. When the shock passes, the division of labour remains constrained by the smaller stock of knowledge, and technology has thereby regressed. A slow process of rediscovery is required for the economy to reach its previous level of technological sophistication and population size.
Keywords: division of labour; Malthusian stagnation; technological progress; technological regress
JEL Codes: J11; O10; O33; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Growing population (J11) | Endogenous adoption of new techniques (O33) |
| Endogenous adoption of new techniques (O33) | Increase in the division of labor (L23) |
| Technological progress (O49) | Higher standards of living (I31) |
| Higher standards of living (I31) | Stimulates population growth (J11) |
| Transient shock to population or productivity (E32) | Neglect of certain techniques (Z00) |
| Neglect of certain techniques (Z00) | Loss of knowledge (D83) |
| Loss of knowledge (D83) | Technological regress (O33) |
| Technological regress (O33) | Decline in the stock of technology (O33) |
| Decline in the stock of technology (O33) | Must be rediscovered over time (D15) |