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The Relationship between Population Growth and Economic Growth Over 1870-2013: Evidence from a Bootstrapped Panel-Granger Causality Test

Author

Listed:
  • Tsangyao Chang

    (Department of Finance, Feng Chia University, Taichung, Taiwan)

  • Hsiao-Ping Chu

    (Department of Business Administration, Ling-Tung University, Taichung, Taiwan)

  • Frederick W. Deale

    (Department of Economics, University of Pretoria)

  • Rangan Gupta

    (Department of Economics, University of Pretoria)

  • Stephen M. Miller

    (College of Business, University of Las Vegas, Nevada)

Abstract

This study applies the bootstrap panel causality test proposed by Kónya (2006), which accounts for both dependency and heterogeneity across countries, to test the causal link between population growth and economic growth in 21 countries over the period of 1870-2013. With regards to the direction of population growth-economic growth nexus, we found one-way Granger causality running from population growth to economic growth for Finland, France, Portugal, and Sweden, one-way Granger causality running from economic growth to population growth for Canada, Germany, Japan, Norway and Switzerland, and no causal relationship between population growth and economic growth is found in Belgium, Brazil, Denmark, Netherlands, New Zealand, Spain, Sri Lanka, the UK, the USA and Uruguay. Furthermore, we found feedback between population growth and economic growth for Austria and Italy. Dividing the sample into two subsamples due to a structural break yielded different results in that for the first period of 1871-1951 we found that population growth Granger cause economic growth only for Finland and France, economic growth Granger cause population growth for Denmark, Japan, and Norway and that there is bidirectional causality between population growth and economic growth for both Austria and Italy. For the period of 1952-2013 we found that population growth Granger cause economic growth only for Sri Lanka, economic growth Granger cause population growth for Belgium, Denmark, France, Germany, New Zealand, Spain, Switzerland, and Uruguay and that found bidirectional causality between population growth and economic growth only for Japan. Our empirical results have important policy implications for these 21 countries under study as the directions of causality tend to differ across countries and depending on the time period under question.

Suggested Citation

  • Tsangyao Chang & Hsiao-Ping Chu & Frederick W. Deale & Rangan Gupta & Stephen M. Miller, 2014. "The Relationship between Population Growth and Economic Growth Over 1870-2013: Evidence from a Bootstrapped Panel-Granger Causality Test," Working Papers 201431, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201431
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    References listed on IDEAS

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    More about this item

    Keywords

    Population Growth; Economic Growth; Dependency and Heterogeneity; Bootstrap Panel Causality Test;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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