Population pressure and implications for the world economy: An analysis of the recent past

Camps, Enriqueta

Population pressure and implications for the world economy: An analysis of the recent past

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Camps, E. Population pressure and implications for the world economy: An analysis of the recent past. 2022. handle: http://hdl.handle.net/10230/68595

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Abstract

In this paper we present further quantitative evidence ffor the impact of population growth on the world economy (prices, per capita GDP) during the second demographic transition. We use population growth as a proxy for the evolution of aggregate demand at the world as well as the United Nations population-growth projections to the end of the twenty-first century. Since population can be considered as an endogenous variable of the economy, an Instrumental Variable analysis has been developed in order to obtain different and more reliable results on the causality effect of population growth on the world economy. We compare worldwide results with the Instrumental Variables results of the continents that currently represent the greater population pressure on supply: Sub-Saharan Africa and Asia. From this analysis we conclude that inflation rates are mostly explained by the purchasing power of populations - that is, the aggregate demand - rather than by population pressure.