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Environmental Kuznets Curve in Thailand: Cointegration and Causality Analysis

  • Mohamed Arouri
  • Muhammad Shahbaz
  • Rattapon Onchang
  • Faridul Islam
  • Frédéric Teulon

The study is aim to explore the existence of environmental Kuznets curve (EKC) in case of Thailand over the period of 1971-2010. The EKC relationship posits that as economy grows, measured by per capita income, at the initial stage energy pollutants increase; but starts falling after a certain threshold income has been achieved. The postulated relation produces an inverted U-curve and has been empirically verified for many nations. The paper implements the ARDL bounds testing approach to cointegration in the presence of structural break for a long run relationship among the series; and the error correction mechanism for the short run dynamics. The results confirm cointegration among economic growth, energy consumption, trade openness, urbanization, and energy pollutants and vindicate the presence of an EKC for Thailand. Also, energy consumption and trade openness add to energy emissions while urbanization lowers it. This study provides new insights for policymakers looking for sustainable economic growth and clean environment through a comprehensive economic and environmental policy.

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Paper provided by Department of Research, Ipag Business School in its series Working Papers with number 2014-204.

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Length: 35 pages
Date of creation: 10 Apr 2014
Date of revision:
Handle: RePEc:ipg:wpaper:2014-204
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