Population Change and Economic Development in Albania

Abstract

This paper studies, to what extent have population changes and economic growth have affected each other in Albania. In the last three decades, Albanian economy has been very dependent on population movements. There has been an ongoing debate on the dynamics of economic development and population growth. One theory suggests that fast population growth causes strain on resources that deteriorate the state of the economy. Another theory sees the population growth as an advantage in the long run, rather than a threat. And a third theory suggests that population growth and economic growth do not affect each other.Vector Auto Regression method is used in this paper for data obtained from 1981 to 2013 to estimate the importance of the relationship between the two variables. The data is retrieved from publications of institutions like World Bank and INSTAT. The empirical results state that the relationship between the population and economic growth is existent but weak in Albania.