The Fiscal and Monetary Policies and Environment in GCC Countries: Analysis of Territory and Consumption-Based CO 2 Emissions

Haider Mahmood, Anass Hamadelneel Adow, Muzafar Abbas, Asim Iqbal, Muntasir Murshed and Maham Furqan
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Haider Mahmood: Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia
Anass Hamadelneel Adow: Department of Accounting, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia
Muzafar Abbas: Department of Business Administration, Community College, Prince Sattam Bin Abdulaziz University, Alkharj 11942, Saudi Arabia
Asim Iqbal: Department of Economics, University of Education, Lahore 54000, Pakistan
Maham Furqan: School of Public Policy, Oregon State University, Corvallis, OR 97331, USA

Sustainability, 2022, vol. 14, issue 3, 1-13

Abstract: Expansionary monetary and fiscal policies are necessary for economic and environmental development. The present research studies the impact of monetary policy and fiscal policy on Territory-Based CO 2 (TBC) and Consumption-Based CO 2 (CBC) emissions in Gulf Cooperation Council (GCC) economies from 1990–2019. The cointegration is corroborated through various tests, and long-term relationships are found in both TBC and CBC models. Government expenditures have long-term positive effects on both TBC and CBC emissions and short-term positive effects on TBC emissions in the region. Money supply negatively affects the TBC and CBC emissions in the long run and positively affects TBC and CBC emissions in the short run. Hence, monetary policy needs a long time to have positive ecological effects in the GCC region. Moreover, fiscal policy in both the long and short run and monetary policy in the short run have scale effects in GCC economies. Therefore, we recommend reducing fiscal measures and encouraging monetary policy in the long run to have positive environmental outcomes in the region.

Keywords: fiscal policy; monetary policy; territory-based CO 2 emissions; consumption-based CO 2 emissions (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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