Environmental Quality and Economic Growth: A Panel Analysis of the "U" in Kuznets
The primary motivation behind this study was to search for evidence of the link between environmental quality and economic growth so as to answer the relevant question of whether economic growth alone could serve as a long-run solution to environmental damage as implied by EKC hypothesis. Here we analyze the relationship using a panel of 47 countries over the period 1970 -2008. Using Random-effect estimation and two-stage least square, our results leads to the following conclusions: relying on a quadratic model can easily mislead researchers to ratify the existence of EKC; the EKC hypothesis ceased to hold whenever an alternative functional form (cubic) is employed. At best, the relationship between economic growth and environmental quality is shown to be typified by an N-shaped curve. The paper maintained that simply waiting for an automatic arrival of a delinking point for environmental damage given long-run growth will not be a feasible solution to environmental quality. A number of feasible policy menu and critical questions to guide selection of the best instrument capable of bringing about a downturn in environmental damage have been suggested in the paper.
|Date of creation:||13 Feb 2014|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gene M. Grossman & Alan B. Krueger, 1995.
"Economic Growth and the Environment,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 110(2), pages 353-377.
- Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc.
- He, Jie & Richard, Patrick, 2010. "Environmental Kuznets curve for CO2 in Canada," Ecological Economics, Elsevier, vol. 69(5), pages 1083-1093, March.
- Jie He & Patrick Richard, 2009. "Environmental Kuznets Curve for CO2 in Canada," Cahiers de recherche 09-13, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
- Agras, Jean & Chapman, Duane, 1999. "A dynamic approach to the Environmental Kuznets Curve hypothesis," Ecological Economics, Elsevier, vol. 28(2), pages 267-277, February.
- Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
- Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
- Tom Doan, "undated". "IPSHIN: RATS procedure to implement Im, Pesaran and Shin panel unit root test," Statistical Software Components RTS00098, Boston College Department of Economics.
- Heil, Mark T. & Selden, Thomas M., 2001. "Carbon emissions and economic development: future trajectories based on historical experience," Environment and Development Economics, Cambridge University Press, vol. 6(01), pages 63-83, February.
- Cole, Matthew A., 2004. "US environmental load displacement: examining consumption, regulations and the role of NAFTA," Ecological Economics, Elsevier, vol. 48(4), pages 439-450, April.
- Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
- Caviglia-Harris, Jill L. & Chambers, Dustin & Kahn, James R., 2009. "Taking the "U" out of Kuznets: A comprehensive analysis of the EKC and environmental degradation," Ecological Economics, Elsevier, vol. 68(4), pages 1149-1159, February.
- Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
- Godwin Effiong Akpan & Usenobong Friday Akpan, 2012. "Electricity Consumption, Carbon Emissions and Economic Growth in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 292-306.
- Friedl, Birgit & Getzner, Michael, 2003. "Determinants of CO2 emissions in a small open economy," Ecological Economics, Elsevier, vol. 45(1), pages 133-148, April.
- Akpan, Usenobong F. & Chuku, Agbai, 2011. "Economic Growth and Environmental Degradation in Nigeria: Beyond the Environmental Kuznets Curve," MPRA Paper 31241, University Library of Munich, Germany.
- Martinez-Zarzoso, Inmaculada & Bengochea-Morancho, Aurelia, 2004. "Pooled mean group estimation of an environmental Kuznets curve for CO2," Economics Letters, Elsevier, vol. 82(1), pages 121-126, January.
- Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
- Tom Doan, "undated". "LEVINLIN: RATS procedure to perform Levin-Lin-Chu test for unit roots in panel data," Statistical Software Components RTS00242, Boston College Department of Economics.
- Breitung, Jorg, 2002. "Nonparametric tests for unit roots and cointegration," Journal of Econometrics, Elsevier, vol. 108(2), pages 343-363, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:54461. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.