Economic Development and Environmental Change with Endogenous Birth and Mortality Rates

Abstract

This paper deals with interactions between population growth, wealth accumulation, and environmental change. Wealth accumulation is built on the Solow growth model with Zhang's alternative approach to household behavior with endogenous time distribution between work time, leisure time and time of children fostering. Population dynamics is influenced by the Haavelmo and the Barro-Becker models. Environmental change is modelled on the basis of some growth models with environmental change. The two-sector model describes a complicated interdependence between population change, wealth accumulation, and environmental change with endogenous time distribution in a perfectly competitive market. We simulate the model to demonstrate existence of equilibrium points and motion of the dynamic system. We also examine effects of changes in some parameters on the motion of the economic system. This study makes a unique approach to dynamic relationship between economic growth and population growth with time distribution, number of children and saving as endogenous variables. The general equilibrium dynamic approach makes it possible to examine the effects of changes in the preference and technology on micro-and macroeconomic variables.