Brown University

Department of Economics

Economics 1850 Oded Galor

Problem Set I
The Malthusian Model

1. Towards the end of the 16th century the potato (originated in South Amer-
ica) was brought to Europe. In particular, within a short time period it
became the prime agricultural crop in Ireland. The population of Ireland
that was about 1.4 million in 1600, increased to about 8.2 million by 1841.
Suppose Ireland is in a Malthusian steady-state equilibrium prior to the
introduction of potatoes.

(a) What should have been the increase in the productivity of land, A,
(due to the introduction of potatoes) so as to generate a 5-fold in-
crease in population.

(b) Draw the phase diagram that describes the evolution of population
from one steady-state to another

(c) Given the fact that the Irish economy was in a Malthusian state over
the period 1650-1850 what should we expect the level of income per
capita to be in 1845 relative to the level in 1650?

(d) Draw the phase diagram that describes the dynamics of income per
capita over this period

2. In the years 1845-1846, potato blight destroyed a large fraction of the

potato crops in Ireland and brought about the Great Irish Famine. In
the years (1845-49) the population of Ireland declined by 1/4 (about 1
million people died due to the famine and nearly 1 million left to the UK
& America).

(a) Could the changes in the population of Ireland in the aftermath of

this event be explained by the Malthusian model? What should be
the level of destruction in the land productivity (A) in Ireland?
(b) Draw the phase diagram that describes the decline in population.

(c) What should we expect the level of income per capita after the ad-
justment of the population?

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 (d) Draw the phase diagram that describes the dynamics of income per
capita over this period.

3. Suppose that Europe is in a Malthusian steady-state equilibrium in 1347,

where income per capita is at a level ȳ and population is L̄. The Black
Death (1348-1350) caused a rapid death of 40% of the European popula-
tion

(a) Using the dynamics of population, Lt+1 = (Lt ), and income per
capita, yt+1 = (yt ), depict the transition of Europe to a new Malthu-
sian steady-state
(b) What is the level of income per capita and population in the end of
the adjustment period?
(Note, consider the Black Death as a shock to population without
any e↵ect on the level of technology).

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1.
a. To generate a 5 fold increase in population observed in Ireland, the productivity of the land, A, must be great
enough to continuously maintain income per capita, y, over a long period of time. Namely, 5x increase in
productivity. In addition, as long as income remains above subsistence, population will adjust.

b.

c. Due to decreases in average labor productivity from a sudden population increase (under the Malthusian model),
we should expect income per capita to decline in the short run and return to its original steady state in the long run.
Hence, the level of income per capita in 1845 should, as in 1650, be converging near or at the steady state.

d.

2.
a. Yes, the changes observed in the potato blight can be explained by the Malthusian model; In this instance, the
level of technology (productivity of land, A) suffers an equivalent decline of 1/4, in the short run, for a decrease in
income that is below the subsistence level. Thus, population (L) decreases which raises average labor productivity.
The level of destruction should be that the current value of A cannot support a level of income above subsistence.

b.

c. In the short run, income per capita will be lower that the steady state; however, it will eventually return to the
steady state.
d.

3.
a.

b. At the end of the adjustment period, given that the level of technology remains constant, income per capita and
population are expected to be at the steady state levels.