Population and Economic Growth Theme: Longitudinal Data for a Sample of Balkan Countries
30 Pages Posted: 26 Feb 2012
Date Written: February 25, 2012
In this paper we use pooled cross-sectional (longitudinal data) in a sample of 10 Balkan countries. The period we cover is from 1950-2009 data are for population and economic growth. In the theoretical part we present optimal intergenerational model of population growth .The optimal population growth depends on capital in the future period and future consumption. Consumption should be greater than zero, and less than total capital of the cur-rent generation. In the econometric part OLS regression with dummies the coefficient on Ma-cedonia, is highest significant coefficient meaning, if we control for Macedonia we will on average find more positive association between growth of GDP and population growth. Hausman test was in favor of fixed effects model, but fixed effects and Random effects model showed that there is positive coefficient between GDP growth and population growth. Coefficient in the FE model was statistically significant, which was not case in RE model. From the Fischer’s panel unit root test we reject the null hypothesis that panels contain unit root and we accept the alternative that at least one panel is stationary, for the population growth and GDP growth.
Keywords: Population growth, economic growth, Fixed effects model, Random effects model, OLS with dummies model
JEL Classification: R23
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