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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:How would population growth affect investment in the future? Asymmetric panel causality evidence for Africa
Author:Asongu, Simplice A.ISNI
Year:2013
Periodical:African Development Review (ISSN 1467-8268)
Volume:25
Issue:1
Pages:14-29
Language:English
Geographic term:Africa
Subjects:population growth
investments
economic development
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1467-8268.2013.12010.x/pdf
Abstract:The present generation is experiencing the greatest demographic transition and Africa is at the centre of it. There is mounting concern over corresponding rising unemployment and depleting per capita income. The author examines these issues from a long-run perspective by assessing the relationships among population growth and a plethora of investment dynamics: public, private, foreign and domestic investments. Using asymmetric panels from 38 countries with data spanning from 1977 to 2007, her findings reveal a long-run positive causal linkage from population growth to only public investment. But for domestic investment, permanent fluctuations in human capital affect permanent changes in other forms of investments. Robustness checks on corresponding short-run Granger causality analysis and the long-run 'physical capital led investment' nexus are consistent with the predictions of economic theory. As a policy implication, population growth may strangle only public finances in the long run. Hence, the need for measures that encourage family planning and create a conducive investment climate (and ease of doing business) for private and foreign investments. Seemingly, structural adjustments policies implemented by sampled countries may not have the desired investment effects in the distant future. Bibliogr., notes, sum. [Journal abstract]
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