Agriculture Reference
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and prevention of damages from economic growth. However, this author claims
that the best solution would be for rich countries to reduce the domestic product
increase and improve their eco-innovation.
From a demographic point of view, Bai et al. ( 2012 ) analyzed the relationship
between population indicators and sustainable economic growth in several cities
and provinces of China. They found that cities with greater wealth and with a higher
population tend to obtain more income and, in turn, attract more population. On the
other hand, they also found that there are circular and cumulative processes
between the population demographic and economic growth. In this way if the
Chinese authorities intend to have a sustainable economic growth, they must clearly
define their adjusted public policies.
3 Model, Data, and Results
The model considered was the equation of the second law of Kaldor, where the
productivity growth rate is dependent upon the output growth rate, extended with
more new variables related with demographic, social, and educational aspects,
namely the following: the population density, life expectancy, number of doctors
in medicine, human resources in science and technology, and the infant mortality
rate. The outputs considered in the variables of the original Kaldor second law
equation were used in real prices, after having removed inflation with consumer
index prices. This model was built for the different Portuguese sectors considered in
this current study, namely the following: agriculture, forestry, and fishing; industry
(except construction); manufacturing; construction; wholesale and retail trade,
transport, accommodation, and food service activities, information technology
and communication; financial and insurance activities, real estate activities, and
professional, scientific, and technical activities, administrative and support ser-
vices; public administration and defense; compulsory social security, education,
human health, and social work activities, arts, entertainment, and recreation; repair
of household goods; and other services. The original equation of the Kaldor second
law captures endogeneity of the factors, economic dynamics, spillover effects, and
increasing returns to scale.
The data used were those related with the variables referred to before and were
obtained, for the period 1995-2010, from Eurostat ( 2013 ) for the seven Portuguese
NUTs II. Indeed, Portugal has an unbalanced development between the several
seven regions, where two are islands, and it will be interesting to analyze these
dynamics in their relationship to economic growth and the indicators related to
other components of society, whether trying to identify compatibility and sustain-
ability or not.
The results were obtained with the Stata ( 2011 ) software, with panel data
methods (namely fixed and random effects), and tested with many statistical tests
which are presented in Table 7.1 (where the new variables are considered in levels)
and in Table 7.2 (where the new variables are considered for growth rate). The idea
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