An Empirical Investigation Of Population Change’s Effect On Economic Growth: A Review Of Pakistan

Abstract

The study experimentally provides insight to determine the long-term implications of population change’s and capital stocks along with the control variables of savings rate and trade openness on economic growth in Pakistan. Auto Regressive Distributive Lags (ARDL) assessment procedure has been utilized to decide the longest relationship of 47 years (1972- 2018). The results show that, 1% increase in the population changes measured by dependency ratio reduces economic growth (GDP growth) by 14.9% over the long run. Outcomes additionally influence saving rates, as a 1% increase in savings in a country results in an increase of about 28% in economic growth over the long run. Gross capital formation has an insignificant positive impact on EG. Therefore, policies should be formulated by the Government of Pakistan to decrease the dependent population, accelerate savings, upgrading the trading environment and improve the infrastructure of the economic system to support capital formation.