Investigating the Role of Balance of Population and Economic Growth in Achieving Sustainable Economic Growth (Case Study: Upper-Middle Income Countries during 1985 to 2016)

Habib Allah Sadeghi

doi:10.33422/ijarme.2018.09.10

Abstract

Contrary to the neoclassical view, the population and its components are one of the factors affecting long-term economic growth. Some studies have pointed to the negative impact of population growth and others on its positive impact. The purpose of this paper is to examine the impact of population growth on economic growth from 1985 to 2007 and 1985 to 2016 among the 32 member countries of the upper-middle-income group. Using World Bank data (2016) and the panel’s method, the impact of population growth and birth rate on economic growth in two continuous periods has been investigated. The results show that the more we approach the present time, the impact of population growth and birth rate on economic growth in upper-middle-income countries decreases; consequently if the effect of these two components i.e population growth and birth rate is not controlled in this group of countries and countries with lower income, it will be led a negative effect on economic growth. Therefore, considering this research, the effect of demographic factors can be shown in the long-term; it is important to note that by declining population growth and birth rate in this group of countries, investment, the productivity of the workforce and the population in the age of activity increases. Economic growth reduces due to the disruption of the balance and the increase in population on economic power. By increasing one unit of the population growth, economic growth has achieved to 0.17% reduction in 2016 from a 0.26% increase in 2007.

Highlights

Economic growth, in simple term, is the increase in a country's production in a particular year compared to its amount in base year
The age structure of the population and its relation with economic growth have always been considered to researchers, since studies conducted in population economic field in recent years focused on population dynamics i.e. population growth and its economic implications in the labor market and economic development
The present research has studied the role of demographic factors and demographic components in influencing economic growth

Summary

Introduction

In simple term, is the increase in a country's production in a particular year compared to its amount in base year. The increase in gross national product (GNP) or gross domestic product (GDP) in the year under discussion relative to its value in a base year is considered economic growth. It can be said that economic growth has taken place in that country. It is always expected a higher economic growth rate from developing countries and the third world due to high economic capacities (inactive labor and unused land). In a more comprehensive definition of economic growth: the increase in the country's gross domestic product over a given period, Michael Todaro considers economic growth as a sustainable process, that the economic production

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