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The long-run relationship between population and per capita income growth in China

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  • Hasan, Mohammad S.
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    Abstract

    This paper examines the nature of stationarity, cointegration properties and Granger causality on the relationship between population and per capita income in mainland China in a multivariate vector autoregressive model. This study finds the evidence of a common stochastic trend between population and per capita income which is indicative of long-run relationship between these two variables. Empirical results also indicate that a negative long-run causal relationship is flowing from per capita income to population. The short-run relationship between population growth and per capita income growth is at variance across model specifications. The neoclassical growth model reveals that population growth positively contributes to per capita income growth while the modified endogenous growth model shows a negative relationship between these two variables. Moreover, both neoclassical and endogenous growth models indicate that per capita income growth tends to lower the population growth. The long-run relationship is consistent with Becker's view that as income grows, families tend to prefer quality rather than quantity of children.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 32 (2010)
    Issue (Month): 3 (May)
    Pages: 355-372

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    Handle: RePEc:eee:jpolmo:v:32:y::i:3:p:355-372

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    Web page: http://www.elsevier.com/locate/inca/505735

    Related research

    Keywords: Population growth and per capita income Population 'hawk' argument Population 'revisionist' view Cointegration Rank stability test Error correction model;

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    Cited by:
    1. Simplice Asongu, 2013. "How Would Population Growth Affect Investment in the Future? Asymmetric Panel Causality Evidence for Africa," African Development Review, African Development Bank, vol. 25(1), pages 14-29.
    2. John COCKBURN & Jean-Yves DUCLOS & Agnès ZABSONRÉ, 2012. "Is the value of humanity increasing? A critical-level enquiry," Working Papers P52, FERDI.
    3. Asongu Simplice, 2011. "Long-term effects of population growth on aggregate investment dynamics: selected country evidence for Africa," Working Papers 11/001, African Governance and Development Institute..

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