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Empirica (2017) 44:175201

DOI 10.1007/s10663-016-9315-9

ORIGINAL PAPER

Tsangyao Chang1 Hsiao-Ping Chu2

Frederick W. Deale3 Rangan Gupta3

Stephen M. Miller4

Published online: 4 February 2016 Springer Science+Business Media New York 2016

Abstract This paper examines the linkages between population growth and standard-of-living growth in 21 countries over the period of 18702013. We apply the bootstrap panel causality test proposed by Knya (Econ Model 23:978992, 2006), which accounts for both dependency and heterogeneity across countries. We nd one-way Granger causality running from population growth to standard-of-living growth for Finland, France, Portugal, and Sweden, one-way Granger causality running from standard-of-living growth to population growth for Canada, Germany, Japan, Norway and Switzerland, two-way causality for Austria and Italy, and no causal relationship for Belgium, Brazil, Denmark, Netherlands, New Zealand, Spain, Sri Lanka, the UK, the USA, and Uruguay. Dividing the sample into two subsamples due to a structural break yields different results over the two periods of 18711951 and 19522013. Our empirical results suggest important policy

& Hsiao-Ping Chu [email protected]

Tsangyao [email protected]; [email protected]

Frederick W. Deale [email protected]

Rangan Gupta [email protected]

Stephen M. Miller

[email protected]

1 Department of Finance, Feng Chia University, Taichung, Taiwan

2 Department of Business Administration, Ling Tung University, Taichung, Taiwan

3 Department of Economics, University of Pretoria, Pretoria, South Africa

4 Department of Economics, University of Nevada, Las Vegas, USA

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176 Empirica (2017) 44:175201

implications for these 21 countries as the directions of causality differ across countries and time period.

Keywords Population growth Economic growth Dependency and

heterogeneity Bootstrap panel causality test

JEL Classication C32 C33 O40 Q56

1 Introduction

The causal linkages between population growth and standard-of-living growth remain an important issue, not only for demographers and economists, but also for policy makers. The standard of living equals the ratio of real GDP to population, giving real GDP per capita. Thus, the standard of living increases (decreases) when economic growth (i.e., the growth rate of real GDP) exceeds (falls below) the population growth rate.

Researchers typically attribute the development of the linkages between the standard of living and population growth to Malthus (1798). Malthusian theory includes several assumptions....

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