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 book presents, in a simple and pedagogical way, Unified Growth Theory, its concepts, its workings, its specific mechanics. Developed over the last twenty years, Unified Growth Theory proposes to study, using a single model, the conditions of transition between various regimes, each regime being characterised by its own relationships between economic, demographic and technological variables.

This chapter develops a microfounded model of institutional changes and uses it to examine the joint production of institutions and economic output. In that model, agents must decide to participate in the political life of the city, participation whose level affects the level of the quality of institutions, as well as the possibilities of long-run economic expansion. It is shown that there exists a critical threshold for the quality of institutions below which agents do not participate to the political life, and above which they do participate. It is also shown that the presence of political participation does not suffice to bring immediate economic take-off: several generations of citizens with positive political participation are needed to achieve economic take-off.

This introduction presents the main challenges raised by the economic analysis of the long period, as well as the most recent economic approach called Unified Growth Theory. The introduction also presents the goal of this textbook - to allow all students from economics and the social sciences to have access to Unified Growth Theory, as well as the different parts and chapters of the textbook.

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 provides a short introduction to the main economic approaches to the study of the long period, by focusing on the pioneer works of Malthus, Marx, Marshall, Kondratiev, Rostow and Solow. This allows us also to provide some genealogical elements to Galor's Unified Growth Theory.

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 provides some major stylized facts for the economic analysis of the long period, by focusing on statistical series of GDP, population size and GDP per capita for the last two millenia. The structural break observed in the GDP per capita series is presented as a major challenge for existing economic theories of the long period. How could one explain both a long period of stagnation and, then, an economic take-off followed by sustained growth?

This chapter provides an institutional variant of the model studied in the previous chapter, where the key variable driving the economy's latent dynamics is the quality of institutions. This chapter also analyses, using that framework, the interactions between economic development, institutional changes and inequalities.

This book provides a simple introduction to the economic analysis of the long period by means of Oded Galor's Unified Growth Theory. This aims at making Unified Growth Theory accessible for undergraduate students in Economics and the other Social Sciences. Using simple theoretical frameworks with or without microeconomic foundations, it shows how the major concepts of Unified Growth Theory – the economic regime, the regime shift, critical thresholds, latent dynamics – can be used to study the dynamics of societies over long horizons of time. Applications to the long-run dynamics of production, inequalities, institutions and the natural environment are examined.