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Carbon Emissions and Economic Growth: Homogeneous Causality in Heterogeneous Panels

  • David Maddison
  • Katrin Rehdanz

This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous non-causality hypothesis that CO2 emissions does not Granger cause GDP cannot be rejected if heterogeneity is allowed for in the data-generating process. In North America the homogeneous non-causality hypothesis that GDP does not cause CO2 emissions cannot be rejected either

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File URL: https://www.ifw-members.ifw-kiel.de/publications/carbon-emissions-and-economic-growth-homogeneous-causality-in-heterogeneous-panels/KWP%201437.pdf
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1437.

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Length: 32 pages
Date of creation: Jul 2008
Date of revision:
Handle: RePEc:kie:kieliw:1437
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