An Empirical Analysis of the Effects of Population Growth on Economic Growth in Ethiopia Using an Autoregressive Distributive Lag (ARDL) Model Approach

Abstract

Between 1980 and 2020, the study looks at “An Empirical Analysis of the Effects of Population Growth on Economic Growth in Ethiopia Using an Autoregressive Distributive Lag (ARDL) Model Approach.” The appraisal coefficient of population growth (POP) and the implication is positive and significant, according to the findings of this study. However, in response to the long-term association between population expansion and economic growth in Ethiopia, the macroeconomic variables were subjected to a limit test and a broader causality test. From the finding of bound test, since the value of F-statics is greater than the upper boundary line, there are long run equilibrium relationships among RGDP, population size, foreign direct investment, personal remittance, population growth rate, rate of inflation, and gross capital formation. According to the findings of the Granger causality test, real gross domestic product can cause Ethiopian population size (POP), but population number (POP) cannot cause real gross domestic product at the same time. The motivation of doing this research was to know the sign and effects of population growth on economic growth. Finally, in order to boost Ethiopia’s economic growth, the government should implement policies that would attract foreign investors. The government should also establish a benchmark to ensure that the economy increases faster than the population.