Journal of Finance and Economics
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Journal of Finance and Economics. 2015, 3(2), 44-50
DOI: 10.12691/jfe-3-2-3
Open AccessArticle

Impact of Demographic Transition on Economic Growth of Pakistan

Khalid Iqbal1, , Nazia Yasmin2 and Muhammad Rizwan Yaseen2

1MPhil (Economics) Scholar, Government College University, Faisalabad, Pakistan

2Department of Economics, Government College University, Faisalabad, Pakistan

Pub. Date: April 23, 2015

Cite this paper:
Khalid Iqbal, Nazia Yasmin and Muhammad Rizwan Yaseen. Impact of Demographic Transition on Economic Growth of Pakistan. Journal of Finance and Economics. 2015; 3(2):44-50. doi: 10.12691/jfe-3-2-3

Abstract

The global process of demographic transition has had profound and far reaching social and economic implications for the world. Pakistan is in the third stage of demographic transition and this scenario is marked with new options, opportunities, challenges and vulnerabilities. This paper examines the impact of demographic transition and economic growth of Pakistan by using the time series data over the time period of 1974 to 2011. The study used the bound testing approach to co-integration; Autoregressive Distributed Lag (ARDL) model was also applied for analyzing the long run relationship whereas Error Correction Mechanism (ECM) was applied for analyzing the short run link of the demographic variables with economic growth. The numerical simulation of the study exhibited that the demographic transition positively affected the economic growth in the long run and negatively in the short run. The cohesive policy was also suggested to capitalize the demographic gift.

Keywords:
demographic transition gross domestic product rate of natural increase life expectancy working age population window of opportunity and ARDL

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