Revisiting Malthusian Trap Theory in Bangladesh: A Time Series Approach to Recognize the Existence of the Trap

Abstract

The key feature of the Malthusian model is that output per capita is strongly linked to population growth (Olsson, 2012). This paper uses data from 1996 to 2020 to justify the existence of the Malthusian trap in Bangladesh. Data collection includes per capita GNI growth rate (PCGNI GR), industrial growth rate (IND GR), GNI growth rate (GNI GR), and population growth rate (PGR). Here the regression model and cointegration test have been used to justify the relevance of the theory in case of Bangladesh. According to the regression results and the value of normalized cointegrating coefficients it is found that the change in the growth rate of per capita GNI is same directional at a same rate to the change in the growth rate of GNI of Bangladesh. That means, if the growth rate of GNI increases or decreases by 1% then the growth rate of per capita GNI will also increase or decrease to the same percentage. On the other hand, the population growth has a cent percent negative effect on the growth of per capita GNI. This means that, an increase in per capita income due to an increase in total income will be offset by population growth. These results prove that the Malthusian trap theory is quite relevant for Bangladesh. The results also show that the industrial growth has positive influence on the per capita income of Bangladesh, which can break the trap. Therefore, steps must be taken to control population growth and improve industrial sector to break down the trap.