Combining Economic Growth and Financial Development in Environment-Health Nexus

Han Dongping, Mansoor Ahmed Golo, Qamaruddin Mahar, Syed Safdar Ali Shah and Maysa Kadyrova

Politická ekonomie, 2023, vol. 2023, issue 6, 730-757

Abstract: This study examines the impact of monetary developments on environmental quality and economic growth. We utilize ARDL/PMG models to study twelve climatically vulnerable countries from 1996 to 2018. We find that a 1% increase in real GDP and domestic credit harms the environment by 0.827% and 0.220%, respectively. However, savings improve environmental excellence by 0.373%. A 1% environmental degradation decreases human health by 0.317%; consequently, economic growth declines by 1.102%. Good governance emerges as a key solution, with a 1% improvement in public institutions mitigating the adverse impact of real GDP on the environment by 0.777%. Redirecting 1% of loans to eco-friendly projects improves the environment by 1.311%. Dumitrescu-Hurlin and PVAR Granger tests support these findings.

Keywords: Environmental degradation index; human health index; PCA technique; panel ARDL method; good governance; high-risk countries (search for similar items in EconPapers)
JEL-codes: C33 O44 Q51 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.18267/j.polek.1405

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