Uncertain Effects of Economic Policy, Institutional Quality, and Renewable Energies on Green Growth: A Case Study of Iran

Zahra Karimi Takanlou (), Amir Ali Farhang () and Ali Mohammadpour ()
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Zahra Karimi Takanlou: Associate Professor of Economics (Author), Tabriz University
Amir Ali Farhang: Assistant professor of Payame Noor University of Tehran
Ali Mohammadpour: PH.D student of Economic Science, Tabriz University

Quarterly Journal of Applied Theories of Economics, 2023, vol. 10, issue 4, 65-102

Abstract: Global climate change, exacerbated by the emission of greenhouse gases (mainly carbon dioxide), poses a significant threat to life, the global environment, and development. Environmental degradation is a highly debated issue in international forums and is recognized as a significant concern worldwide. Consequently, researchers and policymakers have shifted their focus from traditional economic growth to green growth. This study explores the influence of economic policy uncertainty, renewable energy consumption, and institutional quality on green growth in Iran from 2002 to 2020. Economic policy uncertainty is measured using a composite index that incorporates currency, monetary, and financial policy uncertainty, calculated through ARCH and GARCH econometric models. Green growth is defined as economic growth adjusted for environmental considerations, based on Ahmed et al. (2022) and Sohag et al. (2022). The Quantile Auto Regressive Distributed Lag (QARDL) method is employed for data analysis. Empirical findings reveal that economic policy uncertainty negatively affects green growth across all quantiles (0.25, 0.50, 0.75, and 0.95), whereas renewable energy consumption and institutional quality contribute positively to green growth. Control variables, including capital stock, employment, and degree of trade openness, are also incorporated in the analysis. Trade openness and capital positively influence green growth across all quantiles, while employment has a negative impact

Keywords: green growth; economic policy uncertainty; institutional quality; Renewable energies; QARDL (search for similar items in EconPapers)
JEL-codes: C22 F17 F31 F41 (search for similar items in EconPapers)
Date: 2023
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