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Economic Growth and Population Growth: Empirical Testing Using Malaysian Data

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Author(s): Dullah Mulok | Rozilee Asid | Mori Kogid | Jaratin Lily

Journal: Interdisciplinary Journal of Research in Business
ISSN 2046-7141

Volume: 1;
Issue: 5;
Start page: 17;
Date: 2011;
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Keywords: Real GDP | Population | Cointegration | Causality | Malaysia

ABSTRACT
Malaysia’s population has grown from about 7 million people in 1960 to about 28 million in 2009. In relation to that, Malaysia’s economy in terms of real GDP has also grown tremendously from about 5.6 million in 1960 to about 520 million in 2009. In addition, employment rate has risen from 5.2 million in 1982 to about 10.9 million in 2009. These encouraging developments seem to indicate that there is a relationship between population growth and economic growth. Thus, this paper attempts to investigate the empirical relationship between the economic growth and the population growth taking Malaysia as a case study. Our findings do not support the existence of a long-run relationship between the economic growth and the population growth. Our results also show that there is no causal relationship between economic growth and population growth. Thus, this study proposes that economic growth is not the cause of population growth and vice versa. Some countries have experienced higher economic growth even with a small population. Others experience lower economic growth with a large population.
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