We consider a demoeconomic model where output is produced using physical ca
pital, human capital and technology as inputs. Human capital depends on the
number of people and the level of education in the economy. The dynamics o
f labour, physical capital, education and technology are endogenously deter
mined such as to reflect the interdependence between economic and demograph
ic factors. The longrun path of the economy and in particular the possibili
ty to escape the Malthusian trap crucially depend on technological progress
, which provides for economy wide increasing returns to scale. The build up
of technology is positively related to the stock of human capital, Our mod
el predicts that positive population growth is sufficient to escape the Mal
thusian trap.