Agricultural productivity growth and escape from the Malthusian Trap

Industrialization allowed the industrialized world of today to escape from the Malthusian regime characterized by low economic and population growth and to enter the post-Malthusian regime of high economic and population growth. To explain the transition between these regimes, we construct a growth model with two consumption goods, (an agricultural and a manufacturing good), endogeneous fertility, and endogeneous technological progress in the manufacturing sector. We show that with an endogeneous increase in the growth of agricultural productivity our model is able to replicate stylized facts of the British industrial revolution. The paper concludes by illustrating that our proposed model framework can be extended to include the demographic transition i.e. a regime in which economic growth is associated with falling fertility.