An Investigation of the relationship between Population Growth and Economic Growth in Zambia (1970-2021)

Abstract

The research endeavoured to investigate the correlation between population growth and economic development in Zambia, employing annual time series data spanning from 1970 to 2021 and employing a comprehensive analytical toolkit that encompasses the autoregressive distributed lag model, the Dickey-Fuller Generalised least squares unit root test, the Phillips Perron test, and the error correction model. A number of fascinating insights into the dynamics at play are revealed by the outcomes of the investigation. There are some variables that exhibit stationarity at their initial levels, whereas there are others that only demonstrate stationarity when evaluating changes between consecutive observations. Over the course of both the short and the long run, the Autoregressive Distributed Lag bound test highlights the existence of a discernible relationship among the variables. It is important to note that the long-term research indicates that inflation and foreign direct investment have a favourable influence on the pace of growth of the domestic product. On the other hand, the age dependency ratio and the average growth rate of the population are both related with a negative impact on the growth rate of the gross domestic product. In spite of these tendencies that have been detected, the findings do not reach the level of statistical significance required for a confidence level of 5%. Thus, the analysis does not produce any strong statistical evidence to support the hypothesis that there is a causal connection between the growth of Zambia's economy and the country's growing population. This sophisticated view highlights the necessity of having a full understanding of the complex dynamics that are influencing the economic landscape of Zambia. Keywords: Economic Growth; Population Growth; ARDL; Cointegration; and Correlation.