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The Physiological Foundations of the Wealth of Nations

44 Pages Posted: 6 Feb 2010  

Carl‐Johan Dalgaard

University of Copenhagen - Department of Economics

Holger Strulik

University of Goettingen (Gottingen) - School of Law, Economics, Social Sciences

Date Written: January 29, 2010

Abstract

Evidence from economics, anthropology and biology testifies to a fundamental trade-off between the number of offspring (quantity) and amount of nutrition per child (quality). This leads to a theory of pre-industrial growth where body size as well as population size is endogenous. But when productive quality investments are undertaken the historical constancy of income per capita seems puzzling. Why didn't episodes of rising income instigate a virtuous circle of rising body size and productivity? To address this question we propose that societies are subject to a “physiological check”: if human body size rises, metabolic needs - our conceptualization of “subsistence requirements” - rise. This mechanism turns out to be instrumental in explaining why income growth does not take hold and societies remain near an endogenously determined subsistence boundary. When we use the theory to shed light on pre-industrial cross-country income differences we find that 60-70% of the income differences in 1500 can plausibly be accounted for by variations in subsistence requirements.

Keywords: Malthusian stagnation, subsistence, nutrition, body size, population growth

JEL Classification: O11, I12, J13

Suggested Citation

Dalgaard, Carl‐Johan and Strulik, Holger, The Physiological Foundations of the Wealth of Nations (January 29, 2010). Univ. of Copenhagen Dept. of Economics Discussion Paper No. 10-05. Available at SSRN: https://ssrn.com/abstract=1548422 or http://dx.doi.org/10.2139/ssrn.1548422

Carl-Johan Lars Dalgaard (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 3532 4407 (Phone)

Holger Strulik

University of Goettingen (Gottingen) - School of Law, Economics, Social Sciences ( email )

Germany

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