Cointegrating Polynomial Regressions With Power Law Trends: Environmental Kuznets Curve or Omitted Time Effects?

Arbeitspapier

The environmental Kuznets curve predicts an inverted U-shaped relationship between air pollution and economic growth. Current analyses frequently employ models that restrict nonlinearities in the data to be explained by economic growth only. We propose a Global Trend Augmented Cointegrating Polynomial Regression (GTACPR) to allow for nonlinearities in time and economic growth. The theoretical properties of the GTACPR are established. Empirically, a single global trend accurately captures all nonlinearities for all the countries studied, leading to a linear relationship between GDP and CO2. This suggests that the environmental improvement of the last years is due to factors different from GDP.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. TI 2022-092/III

Classification and Topics

• Classification: Wirtschaft ; Hypothesis Testing: General ; Estimation: General ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
• Subject: Cointegration Testing ; Environmental Kuznets Curve ; Cointegrating Polynomial Regression ; Power Law Trends

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lin, Yicong ; Reuvers, Hanno
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/273805
• Last update: 10.03.2025, 11:42 AM CET