Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273805 
Year of Publication: 
2022
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2022-092/III
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
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.
Subjects: 
Cointegration Testing
Environmental Kuznets Curve
Cointegrating Polynomial Regression
Power Law Trends
JEL: 
C12
C13
C32
Q56
Document Type: 
Working Paper

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