Why did English villagers fail to store enough grain to prevent future starvation?
In short: This lecture explores the economic puzzle of why historical English villagers rarely stored sufficient harvest to survive beyond a single year, despite the clear risk of famine. It demonstrates how dynamic economic models and programming can be used to interpret historical data and explain such counterintuitive survival strategies.
Professor Robert Townsend uses the case of English villagers to illustrate the application of dynamic programming in microeconomic theory. By calibrating parameters against historical records, these models provide a framework for understanding decision-making under the threat of future crop failure.
The lecture highlights how dynamic programming serves as a powerful analytical tool for economists, moving beyond static analysis to capture the complexities of intertemporal choices. This approach helps resolve the apparent contradiction between the villagers' rational need for security and their observed behavior in inventory management.
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Sources
- Summary by Intellect · source: Lecture 6: Dynamics and Programming
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