Classical growth theory predicts that

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Classical growth theory, espoused by economists such as Malthus and Ricardo, was based on the idea that real wage rates were determined by the subsistence level required for workers to survive. Technological progress was seen as increasing the productivity of labor, which in turn increased the demand for labor, driving up real wage rates. However, as real wage rates rose, population growth would also increase, leading to a larger labor force and a decrease in real wage rates back to their subsistence level. Therefore, according to classical growth theory, there would be a cyclical pattern of rising and falling real wage rates driven by changes in demand for labor and population growth.

Classical Growth Theory Predicts That