Abstract
This chapter delves further into the problem of growth theory and what has previously been referred to as low- or high-level equilibrium traps. It is a technical chapter in the sense that we develop a conceptual model that links population, land, output, innovation, and uncertainty in a dynamic and stochastic way. We then establish some initial conditions and calibrations based on data available for Shandong and Hebei, and use Monte Carlo methods to run the model over a 500-year period intended to mimic the years 1400 through 1900. We argue that when risk is explicitly entered into a classical growth model, the resulting dynamics are highly fractional. This leads us to consider the idea of fractional poverty traps.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Lin, J. Y. (1995). The Needham puzzle : Why the industrial revolution did not originate in China. Economic Development and Cultural Change, 43(2), 269–292.
Lin, J. Y. (2008). The Needham puzzle , the Weber question, and China’s miracle: Long-term performance since the Sung dynasty. China Economic Journal, 1(1), 63–95.
Reference is to British sinologist Joseph Needham who published Needham, Joseph. Science and Civilization in China. Volume 1. Cambridge: Cambridge University Press, 1954 and multiple volumes thereafter. Posing the paradox established by Needham as a puzzle appears to have been asked by Needham in Joseph Needham , “Introduction,” in China: Land of Discovery and Invention, by Robert K. G. Temple. (Wellingborough: Patrick Stephens, 1986), page 6.
Boulding , Kenneth. “The Great Laws of Change.” in Anthony M. Tang, Fred M. Westfield and James S. Worley, eds. Evolution, Welfare and Time in Economics. (Lexington: S.C. Heath Lexington Books, 1976).
Simon Winchester ’s biography on Needham explains Needham’s exploits: Winchester, S. (2008). The man who loved China. Harper, NY.
- 2.
Lin, J.Y. (1995). Op Cit, page 271.
- 3.
Lin, J.Y. (1995). Op Cit, page 270. Cf. Mark, page 177, Elvin , Mark. (1973). The Pattern of the Chinese Past. Stanford, Calif.: Stanford University Press.
- 4.
Perkins , D. (1969). Agricultural Development in China, 1368–1968. Aldine Publishers, Chicago Illinois, Chapter 4 and Table IV.1.
- 5.
Perkins , D. (1969). Op Cit, page 63.
- 6.
Huang , P. (1985). The Peasant Economy and Social Change in North China. Stanford University Press, Stanford CA.
- 7.
Reference is to Champa rice which originated in India and found its way to China via Vietnam during the reign of emperor Zhenzong (992–1022). See Barker, R. (2011). “The Origin and Spread of Early-Ripening Champa Rice: It’s Impact on Song Dynasty China” Rice 4:184–186.
- 8.
Elvin , M. (1982). “The Technology of Farming in Late-Traditional China”, Chapter 2 in “The Chinese Agricultural Economy”, Edited by R. Barker, R. Sinha and B. Rose, Westview Press, Boulder Colorado.
- 9.
Elvin M. (1982). Op Cit, page 13, cited from unnamed missionary in “Mémoires Concernant les Chinois (Paris, Nyon, 1776–1814). (Sic).
- 10.
DuHalde , P. (1742). The General History of China; Containing a Geographical, Historical, Chronological, Political and Physical Description of the Empire of China, Chinese Tartary and Tibet., Volume 1, 3rd edition. J. Watts, London, page 8.
- 11.
DuHalde , P. (1772). “The Chinese Traveler Containing a Geographical, Commercial, and Political History of China” Printed for E. and C. Dilly, London, page 211.
- 12.
Malthus , T. R. (1888). An essay on the principle of population: or, A view of its past and present effects on human happiness. Reeves & Turner, page 104.
- 13.
Malthus , T.R. (1888). Op Cit, page 105.
- 14.
Malthus , T.R. (1888). Op Cit, page 105.
- 15.
Nurkse , R. (1952). Some international aspects of the problem of economic development. The American Economic Review, 42(2), 571–583.
- 16.
Nelson , R. R. (1956). A theory of the low-level equilibrium trap in underdeveloped economies. The American Economic Review, 46(5), 894–908.
- 17.
Hagen , E.E. (1959). Population and economic growth. The American Economic Review, 49(3):310–327.
- 18.
Buck , J.L. (1930). Chinese Farm Economy: A Study of 2866 Farms in Seventeen Localities and Seven Provinces in China. University of Chicago Press, Chicago Illinois, pages 147–148,
- 19.
Buck (1930). Op Cit, pages 230–233.
- 20.
Buck (1930). Op Cit, page 315.
- 21.
Buck (1930). Op Cit, page 314.
- 22.
Buck (1930). Op Cit, page 424.
- 23.
Elvin (1973). Op Cit.
Sinha , R.P. (1973). Competing ideology and agricultural strategy: current agricultural development in India and China compared with Meiji strategy. World Development, 1(6), 11–30.
See also Elvin , M. (1984). Why China failed to create an endogenous industrial capitalism. Theory and Society, 13(3), 379–391.
Elvin , M. (1972). ‘The high-level equilibrium trap : the causes of the decline of inventions in the traditional Chinese textile industries’, in W. E. Willmott (ed.), Economic Organization in Chinese Society. Stanford University Press, Stanford CA.
Elvin M. (1996). “Another History: Essays on China from a European Perspective” The University of Sydney East Asian Series #10. Wild Peony, Broadway, NSW, Australia.
- 24.
See Sinha , (1973). Op Cit, fn 62, page 19.
- 25.
Tang, A.M. (1979). China’s agricultural legacy. Economic Development and Cultural Change, 28(1), 1–22.
- 26.
Buck , J.L. (1937). Land Utilization in China: A Study of 16,786 Farms in 168 Localities, and 38, 256 Farm Families in Twenty-two Provinces in China, 1929–1933. Commercial Press, Limited, Agents in the United States , The University of Chicago Press.
- 27.
Huang (1985). Op Cit, pages 182–184.
- 28.
Boserup , E. (1975). The impact of population growth on agricultural output. The Quarterly Journal of Economics, 257–270.
Darity , W. A. (1980). The Boserup theory of agricultural growth: a model for anthropological economics. Journal of Development Economics, 7(2), 137–157.
- 29.
Simon , J. (1977). The economics of population growth . Princeton University Press, Princeton, NJ, page 137.
- 30.
Hagen (1959). Op Cit.
- 31.
Hagen (1959). Op Cit, page 315.
- 32.
Carter , M.R., and C.B. Barrett , (2006). The economics of poverty traps and persistent poverty : An asset-based approach. The Journal of Development Studies, 42(2), 178–199.
- 33.
For origination of first, second, third, and fourth generation poverty measures see Carter and Barrett (2006), Op Cit. Figure 1, page 180. Carter and Barret were actually seeking to classify econometric approaches to measuring poverty traps . We are taking a few liberties in our discussion.
- 34.
This is the approach used in Zhou, L ., and C.G. Turvey , (2015). Testing Asset Dynamics for Poverty Traps in Rural China. Canadian Journal of Agricultural Economics, 63(1), 129–162.
- 35.
Systemic or covariate risks may affect large populations at a moment in time, e.g. floods or drought . These are also referred to as systemic risks.
- 36.
Examples of how understanding risk, and measuring asset loss or famine for purpose of insurance see Chantarat , S., Barrett , C. B., Mude , A. G., & Turvey , C. G. (2007). Using weather index insurance to improve drought response for famine prevention. American Journal of Agricultural Economics, 89(5), 1262–1268
and for an example of a fourth generation approach that measures resilience and asset dynamics with insurance in place, see Chantarat , S., Mude , A. G., Barrett , C. B., & Turvey , C. G. (2017). Welfare impacts of index insurance in the presence of a poverty trap . World Development, 94, 119–138.
- 37.
This claim appears to be validated by Kumar , C. S., Turvey , C. G. , & Kropp , J. D. (2013). The impact of credit constraints on farm households: Survey results from India and China. Applied Economic Perspectives and Policy, 35(3), 508–527.
- 38.
Barrett , C. B., and B.M. Swallow , (2006). Fractal poverty traps . World development, 34(1), 1–15.
- 39.
Huang , P. (1985). Op Cit.
- 40.
Perkins , D.H. (1969). Op Cit, pages 28–29.
- 41.
The dynamic is close to Boulding ’s and other specifications. He measures the population above subsistence but also includes what he refers to as an improvement coefficient to capture technological change, and a scarcity coefficient to capture resilience. Boulding (1955). Op Cit, pages 199–201.
- 42.
Perkins (1969). Op Cit, Mathematical Supplement, pages 79–84.
- 43.
Lin, J.Y. (1995). Op Cit, page 271.
- 44.
Huang (1985). Op Cit, Appendices B and C.
Perkins , D. (1969). Op Cit.
- 45.
Buck , J.L. (1930). Op Cit, page 425.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Fu, H., Turvey, C.G. (2018). Low-Level Equilibrium and Fractional Poverty Traps. In: The Evolution of Agricultural Credit during China’s Republican Era, 1912–1949. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-76801-4_3
Download citation
DOI: https://doi.org/10.1007/978-3-319-76801-4_3
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-76800-7
Online ISBN: 978-3-319-76801-4
eBook Packages: Economics and FinanceEconomics and Finance (R0)