THE QUALITY OF LIFE AND ECONOMIC GROWTH IN ETHIOPIA (Auto regressive Distributive Lag Approach)

Abstract

The objective of the study is to examine the nexus between economic growth and quality of life in Ethiopia by using annual time series data over the period 1990-2020 which obtained from World Bank National Bank of Ethiopia Central statistics Agency and National planning& Economic development commission to achieve the stated objective of the study. The researcher used Per Capita Growth Domestic Product as independent variable and privet consumption which peroxides Quality of life, Growth Enrollment ratio, Urbanization Rate, growth Capital Formation and labor force participation Rate are as the dependent variables. The study applied autoregressive distributed lag (ARDL) approach to examine the nexus among the stated variable. Granger causality test approach was applied to examine the directions of causality between variables. From the result of Auto Regressive Distributive Lag, there is positive association between Per Capita Growth Domestic Product and Quality Of Life as well as positive association and statistically significant between Per Capita Growth Domestic Product and Urbanization Rate and Negative association between Per Capita Growth Domestic Product and Growth Enrollment ratio Bounds co integration test shows that there is significant relationship between Per capital Growth Domestic product and Quality of Life in the short and long run. Error correction model also identified the last period deviation from long run Equilibrium is highly adjustable because CointEq(-1)* -0.962545. Based on the result of the study