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  • The Neo-Malthusian Population Theory Assumes that Poor Nations Will Never Be Able to Rise Much Above Subsistence Levels Unless They Engage in Preventive Population Checks, if not Positive Checks

     

    Essays2 Economics

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ID number:340305
Evaluation:
Published: 17.05.2004.
Language: English
Level: Secondary school
Literature: n/a
References: Not used
Extract

The other part to the theory states that there is a link between growth rates of aggregate income (when there is no population growth) and the levels of per capita income. A directly proportionate conclusion might easily be reached that if aggregate income is rising then per capita income has to be increasing and if the total population is growing faster than the total income, per capita income must be falling. The ideology of the theory doesn't stop here because it is based on the positive assumption that saving increases with the incremental increase of income. Quite simply countries that have a higher per capita income are assumed to be able to generate a higher savings rate and rationally more money is available for investment. It is assumed though that beyond a certain point in per capita income is supposed to level off and in some cases decline as new investments are made and more people are forced to work with fixed amount of land and resources. This is called the point of diminishing returns in the Malthusian model, the aggregate income growth is analogous of the total production curve, at least that's how the basic theory of production goes.…

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