Nexus between Population, Income, Output and Employment: Econometric Evidence from India
Pages : 96-103Download PDF
Keynesian theory of income, output and employment is a short run theory and assumes constant population size. But in reality income, output and employment are not the short term phenomena; neither the size of population can be constant. The present paper attempts to analyse the relationship of income, output, and employment with population growth in context of India. Multivariate regression analysis is used to establish the relationship between the variables. ARIMA model is applied to forecast the population growth in India. The results suggest that there is significant effect of population growth on income, output and employment and ARIMA (1, 1, 2) is the most suitable model to be used for forecasting population growth. In depth analysis suggests that population growth rates shows downward trend. The paradox of growth in GDP and unemployment rate is also observed.
Keywords: Income, Output, Employment, Population Growth, Multivariate Regression Analysis, ARIMA JEL: E12, C32, O04