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How Do Carbon Emissions Respond to Economic Shocks? Evidence from Low-, Middle- and High-Income Countries

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  • Shahbaz, Muhammad
  • Khraief, Naceur
  • Hammoudeh, Shawkat

Abstract

In this study, we examine the stationarity of CO2 emissions per capita for 98 low-, middle- and high-income countries from 1975 to 2014. To this end, we conduct the nonlinear unit root test developed by Kruse (2011) given that nearly half of the series exhibit nonlinear behaviour over the time period. This empirical evidence provides support for the non-stationarity hypothesis that 50% of CO2 emissions are from middle-income countries. For the robustness check, we use the panel unit root tests described by Carrion-i-Silvestre et al. (2005) and Bai and Carrion-i-Silvestre (2009), which allow for structural breaks and cross-section dependence. The results provide evidence of stationarity for all three income groups.

Suggested Citation

  • Shahbaz, Muhammad & Khraief, Naceur & Hammoudeh, Shawkat, 2019. "How Do Carbon Emissions Respond to Economic Shocks? Evidence from Low-, Middle- and High-Income Countries," MPRA Paper 93976, University Library of Munich, Germany, revised 15 May 2019.
    • Handle: RePEc:pra:mprapa:93976
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    Keywords

    CO2 emissions; Stationary; Global level;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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