Slow Growth, Take-Off, and Slowdown: Demand Saturation and Long-Run Development

Elie Gray, André Grimaud and David Le Bris

No 18-906, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: To explain the process of development, we introduce a three-sector model (agriculture, manufacturing, services) in which each sector experiences distinct productivity gains and preferences exhibit saturation in the demand for agricultural and manufactured goods. This model accounts for an initial slow growth phase ("Malthusian era"), a rapid growth period after a takeoff, and a subsequent slowdown leading to a possible new era of weak growth. Suggestive calibrations, grounded in economic history evidence, illustrate how the model can generate trajectories broadly consistent with long-run empirical patterns. Our contribution highlights the key role played by saturation in the demands for certain goods in shaping the historical dynamics of structural change and growth.

Keywords: Growth model; Structural change; Unified growth; Economic development; Demand saturations (search for similar items in EconPapers)
JEL-codes: N10 O11 O41 (search for similar items in EconPapers)
Date: 2018-03, Revised 2026-08
New Economics Papers: this item is included in nep-gro and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:32577

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