ON INTERPRETING OBSERVED RELATIONSHIPS BETWEEN POPULATION-GROWTH AND ECONOMIC-GROWTH - A GRAPHICAL EXPOSITION

Transition theory can explain the lack of observed association or even a positive association between population growth and economic growth following the onset of demographic transition even if the underlying long-term relationship between these variables is negative, because the theory assumes that population growth is, at least partially, driven by economic change, resulting in simultaneity bias. This note demonstrates the existence of such bias through a simple graphical exposition. The illustration can account for a variety of patterns of association between population growth and economic growth, including the reemergence of a negative correlation at a later stage of development. -Author