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Assume output of food is produced by a standard production func- tion in terms of labour and land. Land is in fixed supply. Population growth
- Assume output of food is produced by a standard production func- tion in terms of labour and land. Land is in fixed supply. Population growth responds positively to the standard of living, proxied by the level of food supply per person.
- (a)Show diagrammatically that in this framework, a one-off im- provement in technology will have only a temporary impact on the standard of living. (40 marks)
- (b)Now assume that the production function also includes a role for physical capital. If the initial improvement in technology also boosts capital accumulation, how does this affect your an- swer to part (a)? (10 marks)
- (c)Over the course of the past two centuries or so, a number of countries have escaped from poverty; and most countries have seen at least some growth in living standards (broadly defined). Discuss the mechanisms that have enabled this to occur, and the modifications to the modelling framework in parts (a) and (b) that can reconcile it with the data. (50 marks)
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