Economic growth and environment quality: New evidence using continuous wavelet

Fallahi, Firouz; Porebadallahan, Mohsen; Sadeghi, SeyedKamal; Shokri, Tohid

doi:10.30473/egdr.2020.49586.5499

Document Type : Quarterly Journal

Authors

¹ Associate Professor, Faculty of Economics and Management, University of Tabriz, Iran

² Ph.D. Student in Economics, University of Tabriz, Iran

https://doi.org/10.30473/egdr.2020.49586.5499

Abstract

The relationship between the economic growth and the environment quality and degradation is one of the most debated topics among the economists and environmentalists. Economic growth usually requires more consumption of energy, which leads to more environment degradation. Substituting renewable energy sources for fossil fuels would prevent environment degradation; however, it will hinder the economic growth. Therefore, the relationship between the economic growth and environment could go in both directions and previous studies have shown different results. This study uses time-frequency analysis through wavelet transforms to examine this relationship in Iran using the data from the first quarter in 1991 to the last quarter in 2016. This approach allows identifying the change in the relationship between the variables over different time horizons. To that end, we calculate the coherence and energy of the wavelets over different time horizons using Matlab 2018a. The results show that in the short-run (less than a year) and mid-run (between one and four years), economic growth is the cause of environment and an increase in the economic growth would cause environment degradation. The results from the short and medium run show that this relationship was much stronger during the periods 2012-2015 and 2009-2010. However, in the long run, there is no causality between the two variables so environment regulations would not hinder the economic growth.

Keywords

References

احسانی، محمدعلی و طاهری بازخانه، صالح (1397). "کشف پویایی‌های رابطه علّی بین نقدینگی و اجزای تشکیل‌دهنده‌ی آن با تورم". مجله تحقیقات اقتصادی، 53(2)، 278–253.

بهبودی، داوود و سجودی، سکینه (1389). "محیط زیست و رشد اقتصادی پایدار: مطالعه موردی ایران". مدلسازی اقتصادی، 4(2)، 18–1.

پیرس، دیوید و وارفورد، جرمی فی (1377). "دنیای بیکران: اقتصاد، محیط زیست و توسعه پایدار". مترجمان: عوض کوچکی، علی کلاهی‌اهری، سیاوش دهقانیان. مشهد: دانشگاه فردوسی مشهد، 605-1.

جعفری صمیمی، احمد و احمدپور، سیدمحی الدین (1390). "بررسی رابطه شاخص عملکرد محیط زیست و رشد اقتصادی در کشورهای توسعه یافته". پژوهشنامه اقتصاد انرژی، (1)1، 72–55.

حسن شاهی، مرتضی و نیکوبخت، زهرا (1393). "رابطه علّیت بین رشد اقتصادی و آلودگی هوا". مجله اقتصاد منابع طبیعی، 3(1)، 100–87.

خوچیانی، رامین و نادمی، یونس (1397). "بازنگری در رابطه شکاف تولید و تورم برای اقتصاد ایران با استفاده از رویکرد تبدیل موجک". فصلنامه پژوهشنامه اقتصادی، (69)18، 334–307.

درگاهی، حسن (1395). "طراحی مدل کلان سنجی برای آینده‌نگری اقتصاد کلان". مؤسسه عالی آموزش و پژوهش مدیریت برنامه‌ریزی: طرح پژوهشی، 459-1.

شویک‌لو، امیررضا (1397). "آنالیز و تفسیر داده‌های حسی با استفاده از تحلیل مؤلفه‌های اصلی (PCA)". علوم و صنایع غذایی، (15)80، 377–361.

فلاحی، فیروز، اصغرپور، حسین، بهبودی، داوود و پورنظمی، سیمین (1391). "آزمون منحنی زیست محیطی کوزنتس در ایران با استفاده از روش LSTR". مطالعات اقتصاد انرژی، 32(9)، 93-73.

فلاحی، فیروز؛ اصغرپور، حسین و عبداله زاده، سجاد (1394). "بررسی پویایی رابطه علّیت بین قیمت مصرف‌کننده و قیمت تولیدکننده در ایران: کاربرد تبدیل موجک پیوسته". پژوهش‌های اقتصادی ایران، 20(62)، 107–81.

ناهیدی امیرخیز، محمدرضا؛ رحیم‌زاده، فرزاد و شکوهی‌فرد، سیامک (1397). "بررسی رابطه‌ رشد اقتصادی، مصرف انرژی و انتشار گازهای گلخانه ای مطالعه موردی: کشورهای منتخب سازمان همکاری اسلامی". فصلنامه علوم و تکنولوژی محیط زیست، انتشار آنلاین از تاریخ 28 مرداد 1397.

Aguiar-Conraria, L., Azevedo, N. & Soares, M. J. (2008). “Using Wavelets to Decompose the Time-Frequency Effects of Monetary Policy”. Physica A: Statistical Mechanics and its Applications, 387, 2863–2878.

Aye, G. C. & Edoja, P. E. (2017). “Effect of Economic Growth on CO2 Emission in Developing Countries: Evidence from a Dynamic Panel Threshold Model”. Cogent Economics & Finance, 5(1), 1379239, published Online: 24 Sep 2017.

Bilgili, F. & Ulucak, R. (2018). “Is there Deterministic, Stochastic, and/or Club Convergence in Ecological Footprint Indicator Among G20 Countries?”. Environmental Science and Pollution Research, 25(35), 35404-35419.

Caraiani, P. (2012). “Money and Output: New Evidence Based on Wavelet Coherence”. Economics Letters, 116(3), 547-550.

Chiu, Y. B. (2012). “Deforestation and the Environmental Kuznets Curve in Developing Countries: A Panel Smooth Transition Regression Approach”. Canadian Journal of Agricultural Economics/Revue Canadienne D'agroeconomie, 60(2), 177-194.

Clayton, S., Kals, E. & Feygina, I. (2016). “Justice and Environmental Sustainability”. In Handbook of Social Justice Theory and Research 369-386, Springer, New York, NY.

Esteve, V. & Tamarit, C. (2012). “Threshold Cointegration and Nonlinear Adjustment Between CO2 and Income: the Environmental Kuznets Curve in Spain, 1857–2007”. Energy Economics, 34(6), 2148-2156.

Galeotti, M., Lanza, A. & Pauli, F. (2006). “Reassessing the Environmental Kuznets Curve for Co₂ Emissions: A Robustness Exercise”. Ecological Economics, 57(1), 152-163.

Greiner, A. (2011). “Environmental Pollution, the Public Sector and Economic Growth: A Comparison of Different Senarios”. Optimal Control Applications and Methods, 32(5), 527-544.

Grinsted, A., Moore, J. C. & Jevrejeva, S. (2004). “Application of the Cross Wavelet Transform and Wavelet Coherence to Geophysical Time Series”. Nonlinear Processes in Geophysics, 11(5), 561-566.

Grossman, G. M. & Krueger, A. B. (1991). “Environmental Impacts of a North American Free Trade Agreement”. National Bureau of Economic Research No.3914, 1-57.

Grossman, G. M. & Krueger, A. B. (1995). “Economic Growth and the Environments”. Quarterly Journal of Economics, 110(2), 353-377.

http://documents.worldbank.org/curated/en/995041468323374213/World-development-report-1992development-and-the-environment.

Joint Research Centre-European Commission. (2008). “Handbook on Constructing Composite Indicators: Methodology and User Guide”. OECD publishing, 1-162. https://www.oecd.org/sdd/42495745.pdf

Loh, L. (2013). “Co-movement of Asia–Pacific with European and US Stock Market Returns: a Cross-Time-Frequency Analysis”. Research in International Business and Finance, 29(3), 1–13.

Lopez, R. (1994). “The Environmental as a Factor of Production: The Effects of Economic Growth and Trade Liberalization”. Journal of Environmental Economics and Management, 27(2), 163-184.

Meadows, Donella H., Meadows, Dennis L., Randers, Jorgen., Behrens III, & William, W. (1972). “The Limits of Growth”. Potomac Associates- Universe Books, 1-205.

Murty, S., Russell, R. R. & Levkoff, S. B. (2012). “On Modeling Pollution-Generation Technologies”. Journal of Environmental Economics and Management, 64(1), 117-135.

Mutascu, M., Pereau, J. C. & Ursu, E. (2016). “A Wavelet Analysis of the Environmental Kuznets Curve in France”. Cahiers Du Gretha. Working Paper, 2016-(10), 1-27.

Roueff, F. & Sachs, R. (2011). “Locally Stationary Long Memory Estimation”. Stochastic Processes and their Applications, 121(4), 813–844.

Sella, L. (2008). “Old and New Spectral Techniques for Economic Time Series”. Univercity of Torino, Department of Economics Research Paper, 9, 1-63.

Shafik, N. & Bandyopadhyay, S. (1992). “Economic Growth and Environmental Quality: Time Series and Cross-Country Evidence”. Policy Research Working Paper Series.

Shahbaz, M., Tiwari, A. K. & Tahir, M. I. (2015). “Analyzing Time–Frequency Relationship Between Oil Price and Exchange Rate in Pakistan Through Wavelets”. Journal of Applied Statistics, 42(4), 690-704.

Sirag, A., Matemilola, B. T., Law, S. H. & Bany-Ariffin, A. N. (2018). “Does Environmental Kuznets Curve Hypothesis Exist? Evidence from Dynamic Panel Threshold”. Journal of Environmental Economics and Policy, 7(2), 145-165.

Torrence, C. & Webster, P. J. (1998). “The Annual Cycle of Persistence in the El Niño–Southern Oscillation”. Quarterly Journal of the Royal Meteorological Society, 124, 1985–2004.

Tzeremes, P. (2018). “Time-Varying Causality Between Energy Consumption, CO2 Emissions, and Economic Growth: Evidence from US States”. Environmental Science and Pollution Research, 25(6), 6044-6060

World Development Report (1992). “Development and Environment”. 1-324.

Economic Growth and Development Research

Economic growth and environment quality: New evidence using continuous wavelet

References

References

Volume 12, Issue 47
June 2022
Pages 37-52

Economic growth and environment quality: New evidence using continuous wavelet

References

References

Volume 12, Issue 47June 2022Pages 37-52

Volume 12, Issue 47
June 2022
Pages 37-52