Working Paper

Carbon Emissions and Economic Growth: Homogeneous Causality in Heterogeneous Panels

Authors

  • David Maddison
  • Katrin Rehdanz
Publication Date

This paper introduces the concept of homogeneous non-causality in heterogeneous panels. This concept is used to examine a panel of data for evidence of a causal relationship between GDP and carbon emissions. The technique is compared to the standard test for homogeneous non-causality in homogeneous panels and heterogeneous non-causality in heterogeneous panels. In North America, Asia and Oceania the homogeneous non-causality hypothesis that CO2 emissions does not Granger cause GDP cannot be rejected if heterogeneity is allowed for in the data-generating process. In North America the homogeneous non-causality hypothesis that GDP does not cause CO2 emissions cannot be rejected either.

Info

JEL Classification
C12, O13, Q54

Key Words

  • Carbon Emissions
  • energy
  • Granger Causality

Related Topics