Does the Environmental Kuznets Curve for CO 2 Emissions Exist for Rwanda? Evidence from Bootstrapped Rolling-Window Granger Causality Test

Felix Nutakor, Sylvestre Bizumuremyi, Jinke Li and Wei Liu
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Felix Nutakor: School of Business, Qingdao University, Qingdao 266071, China
Sylvestre Bizumuremyi: School of Business, Qingdao University, Qingdao 266071, China
Jinke Li: School of Business, Qingdao University, Qingdao 266071, China
Wei Liu: School of Business, Qingdao University, Qingdao 266071, China

Sustainability, 2020, vol. 12, issue 20, 1-11

Abstract: This paper examined the causal relationship between economic growth and carbon dioxide emissions (CO 2 ) in Rwanda using annual data from 1960–2014. The study was conducted within the framework of the environmental Kuznets curve (EKC) hypothesis using the rolling-window bootstrap Granger causality test approach with a rolling-window size of 15 years. The methodology allows for non-constancy in the parameters of the vector autoregression (VAR) model in the short run as well as in the long run. The study found bi-direction causality between the real gross domestic product (GDP) and CO 2 emissions in metric tons per capita. The results from the rolling-window bootstrap Granger causality test show that GDP negatively influenced CO 2 emissions in the 1976–1977, 1990–1993, 2005–2006, and 2007–2013 sub-sample periods. This result depicts a monotonically decreasing EKC, contrary to the standard EKC relationship. The downward-sloping EKC was explained by the transition of the Rwandan economy from an industrial-based economy to a service-based economy. Further, a feedback effect from CO 2 emissions to the economy was established.

Keywords: carbon dioxide emissions; bootstrap rolling-windows Granger causality; economic growth; environmental Kuznets curve hypothesis; Rwanda (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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