We build on the model of Chapter 3 to explain how sedentism could have developed in response to better climate conditions involving higher means and lower variances for temperature and rainfall. Sedentism is defined to mean a willingness of human populations to stay at the same site for multiple generations despite occasional periods of low productivity in relation to other sites. We identify three causal channels leading to sedentism. First, there is a short-run channel where climate improvement leads agents to remain at sites when weather there is temporarily bad, because when conditions are harsh, they are less harsh than they were under the previous climate regime. Second, there is a long-run channel where better climate leads to higher regional population. This causes some people to remain at sites where weather is temporarily bad because sites with good weather are now more heavily occupied than before. Finally, there is a very-long-run channel where higher regional population leads to the use of previously latent resources and technological innovation. These mechanisms help to explain the rise of large sedentary communities in southwest Asia during the Epi-Paleolithic and in Japan during the early Holocene.

Population dynamics are central to any theory of economic prehistory. This chapter explains the Malthusian framework widely used by economists. We rely on these ideas throughout the book. The exposition is graphical and should be accessible to non-economists. We define a production function and the average and marginal products of labor. With fixed natural resources and a fixed technology, food per person decreases as the population of a geographic area increases. Decreasing food per person tends to lower fertility and raise mortality. These demographic effects yield an equilibrium with a stable long-run population. If technology improves, food per person rises at a given population level. In the short run this raises the standard of living for the existing population, but in the long run, population growth brings the standard of living back down to its previous level. The main implication is that in the long run, technological innovation or a better climate raises population but not living standards. We discuss the relationship of these ideas to the concepts of migration, carrying capacity, population density, and population pressure. We conclude with a review of empirical evidence supporting the relevance of Malthusian models for pre-industrial societies.