Towards economic growth and a sustainable future: Insights beyond the Environmental Kuznets Curve

Inzamam Ul Haq, Chunhui Huo and Paulo Ferreira

Politická ekonomie, vol. preprint

Abstract: This study explores the dynamic nexus between economic growth and sustainable development for 92 countries across high-, upper-middle-, lower-middle- and low-income groups. We validate the Environmental Kuznets Curve (EKC) hypothesis from a novel perspective. We employed a novel technique of Narayan et al. (Economic Modelling, 2016, 53, 388-397) through simple cross-correlation estimates and a panel causality technique. The analysis covers data from 1990 to 2022 using annual data. Our findings show that the EKC hypothesis is supported for five out of 92 (5%) countries and that income growth will increase sustainable development for 50 (54%) countries. Notably, the analysis reveals that as income level rises, sustainable development will decrease (increase) within high-income (middle and low-income) countries in the future. The panel causality analysis finds a significant causal relationship across countries. We also address theory and policy implications.

Keywords: EKC hypothesis; economic growth; sustainable development; cross-correlation (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1501

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