Economic Growth, CO2 Emissions, and Financial Development in Jordan: Equilibrium and Dynamic Causality Analysis


  •  Mohamed Mugableh    

Abstract

This article contributes to the existing literature by investigating equilibrium and dynamic causality relationships among economic development, CO2 emissions, energy consumption, financial development, foreign direct investment inflows, and gross fixed capital formation in the case of the kingdom of Jordan over 1976-2010 period. The ARDL approach has been employed to detect co-integration between the series. The VECM Granger causality is also applied to evaluate causal relationships among the variables. The findings suggest the existence of co-integration between economic growth and its determinants. In addition, CO2 emissions, foreign direct investments inflows, and gross fixed capital formation have positive and significant impact on economic growth in long-run. Interestingly, the results of this paper indicate that enviromental Kuznets curve hypothesis does exist between economic development and CO2 emissions in long-run and short-run.


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