Template-Type: ReDIF-Article 1.0
Author-Name:  Lars Sorge and Anne Neumann
Title:  Beyond the inverted U-shape: Challenging the long-term relationship of the Environmental Kuznets Curve hypothesis
Classification-JEL: F0
Volume:  Volume 9
Issue:  Number 2
Year:  2020
Abstract:  This paper empirically tests the validity of the postulated Environmental Kuznets Curve for a panel of 69 countries from 1971 to 2014 which are clustered into all-, high-, middle-, and lower-income groupings. Since the quadratic EKC specification between carbon dioxide emissions and GDP produces highly biased results in favour of an inverted U-shaped pattern, we adopt a cubic formulation and estimate the long-term coefficients signs and significance accounting for country specific slope heterogeneity. Our empirical results rather support a N-shaped than an inverted U-shaped pattern for the pollution income relationship particularly in the all-income panel. We find no evidence of an inverted U-shaped pattern associated with the EKC hypothesis in any panel. Our analysis indicates that promoting economic growth is not a panacea to simply grow out of pollution related problems in the long-term.
Handle: RePEc:aen:eeepjl:eeep9-1-Sorge
File-URL: http://www.iaee.org/en/publications/eeeparticle.aspx?id=333
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