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The dynamic relationships among CO2 emissions, renewable and non-renewable energy sources, and economic growth in India: Evidence from time-varying Bayesian VAR model

Sang Hoon Kang, Faridul Islam and Aviral Tiwari ()

Structural Change and Economic Dynamics, 2019, vol. 50, issue C, 90-101

Abstract: We apply a three-variable VAR model with probabilistic variability using a time-varying parametric approach to determine the dynamic interactions among GDP growth, energy use by renewable energy sources (RES, wind, solar, or hydro) and non-renewable energy sources (NRES, hydroelectric or coal) and CO2 emission. Further, we characterize and quantify the impact of the nexus on the CO2 emissions, energy sources (RES and NRES) vis-à-vis India's economic growth and fluctuations during 1965Q1-2015Q4. We contribute to the literature by finding that stochastic volatility for RES and NRES appear to be U-shaped besides using TVP-VAR model to the Indian context. This U-shaped pattern seems to be related to economic growth. We also observe the time-varying patterns of the impact transmission mechanisms among energy sources, CO2 emissions, and GDP. In addition, the impulse response of GDP from a positive shock to CO2 varies with the type of energy use in different time horizons.

Keywords: Renewable and non-renewable energy; CO2 emission; Economic growth; TVP-VAR model; Stochastic volatility; India (search for similar items in EconPapers)
JEL-codes: O4 Q2 Q3 Q4 (search for similar items in EconPapers)
Date: 2019
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