This chapter complements previous ones by providing microeconomic foundations for the transition from the stagnation regime to the growth regime. These microeconomic foundations consist of a simple model of individuals choosing an education investment, subject to some budget constraints. It is shown that there exists a critical threshold for the stock of knowledge below which the individual does not invest in education, and above which the investment takes place. We then examine relations between individual decisions and the long-run dynamics of knowledge accumulation and economic development.

This chapter extends the previous ones by examining the constraints that the natural environment imposes on economic development over the long period. The congestion of the (finite-sized) planet Earth is examined, as well as the consequences of environmental damages on the possibilities of long-run economic expansion.

This chapter develops a simplified discrete-time version of Kremer's model (Kremer QJE 1993) aimed at explaining the existence of a transition from a stagnation regime (where GDP per capita remains constant despite continuous technological progress) to the modern growth regime (where GDP per capita grows continuously despite population growth). As such, this chapter provides a first illustration of what a Unified Growth Model can bring to the study of the long period. We also use that model to cast some light on the Industrial Revolution, and its particular timing and location in space.

This chapter uses Malthus's Essay on the Principle of Population to provide a simple model of stagnation, which explains GDP per capita’s flat trend during the longest part of History. That model of Malthusian stagnation explains the constancy of standards of living as follows: during the longest part of History, each time a technological progress took place, this was followed by a rise in population size that annihilated any improvement in standards of living. As such, this chapter provides one possible representation of the stagnation regime. Criticisms of that theory of long-run stagnation by Marx, Weyland and others are also examined.