Weekend Reading: John Maynard Keynes: On Speculation, from The General Theory of Employment, Interest and Money

A Brief Cheat-Sheet Note: On the Solow-Malthus Model for Understanding Pre-Industrial Economies

What you need to know:

  1. The Malthusian equilibrium level of productivity and income is (a) the zpg subsistence level of necessities consumption (b) times the taste for luxuries (including urbanization and an upper class, as well as middle-class conveniences) (c) bumped up to make the economy prosperous enough to support population growth at the rate (d) warranted by progress in technology and organization.

  2. The Malthusian equilibrium level of population is (a) the quotient of useful ideas divided by the zpg subsistence level of necessities consumption, (b) times the ratio of the savings rate (boosted by law-and-order and by any imperial peace) to the depreciation rate raised to the elasticity of production with respect to capital intensity, (c) divided by the taste for luxuries, (d) all raised to the salience γ of ideas as opposed to resources in productivity, with (e) two nuisance terms tagging along.


GitHub: https://github.com/braddelong/lecture-support-2020/blob/master/brief-note-solow-malthus.ipynb
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