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Population Growth and Economic Development: Test for Causality

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  • Khalid Mushtaq

    (Assistant Professor in the Department of Agricultural Economics, University of Agriculture, Faisalabad, Pakistan.)

Abstract

This paper examines the existenceof a long-run relationship between population and per capita income in Pakistan for the period 1960-2001 using cointegration analysis. Unit root results show that population is integrated of order zero while per capita income is integrated of order one; further, Johansen’s procedure showthat no long-run cointegrating relationship exists. Thus, population growth neither causes per capita income growth nor is caused by it. A corollary is that population growth neither stimulates per capita income growth nor reduces it.

Suggested Citation

  • Khalid Mushtaq, 2006. "Population Growth and Economic Development: Test for Causality," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 11(2), pages 71-77, Jul-Dec.
    • Handle: RePEc:lje:journl:v:11:y:2006:i:2:p:71-77
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    References listed on IDEAS

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    1. Sims, Christopher A., 1988. "Bayesian skepticism on unit root econometrics," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 463-474.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    3. Darryl Holden & Roger Perman, 1994. "Unit Roots and Cointegration for the Economist," Palgrave Macmillan Books, in: B. Bhaskara Rao (ed.), Cointegration, chapter 3, pages 47-112, Palgrave Macmillan.
    4. Thirlwall, A P, 1972. "A Cross Section Study of Population Growth and the Growth of Output and Per Capita Income in a Production Function Framework," The Manchester School of Economic & Social Studies, University of Manchester, vol. 40(4), pages 339-356, December.
    5. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    6. Kelley, Allen C, 1988. "Economic Consequences of Population Change in the Third World," Journal of Economic Literature, American Economic Association, vol. 26(4), pages 1685-1728, December.
    7. Dickey, David A & Pantula, Sastry G, 1987. "Determining the Ordering of Differencing in Autoregressive Processes," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 455-461, October.
    8. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    9. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    Cited by:

    1. Themba G. Chirwa & Nicholas M. Odhiambo, 2019. "The nexus between key macroeconomic determinants and economic growth in Zambia: a dynamic multivariate Granger causality linkage," Empirical Economics, Springer, vol. 57(1), pages 301-327, July.
    2. Ghamz-E-Ali Siyal & Sajjad Haider Khaqan & Ahsen Mukhtiar & Atta Ur Rehman, 2016. "Analysis of Infrastructure Investment and Institutional Quality on Living Standards: A Case Study of Pakistan (1990-2013)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 315-329.
    3. Rana Nabeel Ahmed & Kahlil Ahmad, 2016. "Impact of Population on Economic Growth: A Case Study of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(3), pages 162-176, September.

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