I was wondering if there are any logical links between population and economic development.
Dear Balazs . Yes I am familiar with these models. the fact that Japan and South Korea are among the densely populated countries and had shown tremendous economic progress and countries like rapidly progressing economies like China where density is not that much of an issue but yes, the size of population do draw concerns show that there are something that exogenous growth theory fails to explain. Is there any coherent link between population and economic growth then? Different countries do move in different paths of development. An economy with a higher population growth can achieve remarkable economic indicators and countries without much population problem do not have an assured growth rate. Population is a problem only if lots of it are inactive and dependants. That's my take on it.
Absolutely Sir,
I find population (and all its variants) very unrelated to what we consider as economic growth (in contrast with the concept of development). Although there may be some statistical correlation (in some contexts positive and in some negative) between the two, such might be a spurious correlation.
Solow model was certainly a theoretical advance in understanding growth. But it has little relevance as far population is concerned. As you rightly mentioned about ageing societies (including China and South Korea). What population does in the Solow model is it increases the slope of the required investment line. Such things may make the steady state come earlier. But the same thing also happens when g increases. Again, is it realistic to assume a declining rate of return to capital use? Assuming that we may enter into the problem of repudiating the hypothesis of "Creative Destruction". I have recently written a paper on the returns to capital scheduled for publication in July. I shall share that with you once it is out.
Coming back to the discussion on population, if we are able to reduce g and d by the amount of increase in n we may still be able to nullify the harmful effects (if any) of population growth (if at all problematic). Focusing too much on population makes lesser sense as it would take a fairly long period to influence population growth and a fairly longer period to reverse it. the problems faced by ageing society. The families have already trained themselves in efficient household management with smaller units.
Yes the macro picture is much more complicated. But the relation can move in the other direction as well. The possibility of growth would mean that the hypothetical economy is working with excess capacity and a growth in population would also mean an increase in output leading to a non-decrease in the per capita measures. Is it necessary to assume that the addition to p due to del n will remain unemployed?
Thanks,
I meant, even in a ceteris paribus assumption, given the labour force participation rate and the unemployment rate fixed, an increase in population would only mean an increase in absolute employment leading to a stagnant per capita output. Why should it fall?
Dear Siba,
Did you work with the Solow model? Witch period and data you use?
Many thanks
Best wishes
Dear Maria, I worked with WDI database. I have taught Solow model at undergraduate level. Thanks for your interest.
In the standard Solow model, population growth is bad for output growth (in the transition to a new steady state) because the stock of existing capital becomes diluted across more people, so that the capital falling to each individual in the economy is less. Once a new (lower) steady state level of output per capita is reached, the latter will stay constant if the rate of population growth as well as the other characteristics of this economy do not change. It is true though that in such steady state the growth rate of total output will be higher, the higher the rate of population growth.
Dear Siba, Yes,there is strong links between population and development.As we foster people-centered development, this goal center around population dynamics of adolescent and youth and women, improvement of gender equality and enabling human right.Population also links with poverty, climate change, migration, ageing,urbanization and environmental sustainability.
For the time being, I do not have an answer to "how?". But I have a strong feeling that population plays the role of a suppressor in the analysis of relationship between development variables. I am working on the idea and should soon be able to share with you. Recently, I wrote a note on the suppressor effect (attached). What I mean to say, it only plays a role jointly with other variables and not independently.
Article Suppressor Variable in Determining Targeted Catch of Exporta...
Theoretically, population growth affects economic development through consumption and saving. High population growth means more consumption and less savings, less investment .This is in a simple way, however, The debate on population growth may have been expressed in somewhat different contexts, such as the relationship of population growth to governance (Plato and Aristotle), to food production (Malthus), to agricultural growth (Boserup), to resource availability (Neoclassical economists, Simon), to pollution (Meadows), and to land degradation (Blaikie and Moore). Some empirical investigation of the relationship between population growth and development indicators reported positive relationship, others reported negative relationship and some reported no relationship
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