An Empirical Time Series Model of Economic Growth and Environment

Lal, Amant (2009): An Empirical Time Series Model of Economic Growth and Environment.

Abstract

In this paper, I use the Solow (1956) model to examine the impact of water pollution on per worker output. I use data from New Zealand. I use an autoregressive distributed lag model that accounts for endogeneity. I also employ the Granger causality tests to examine the direction of causality between water pollution and per worker output. The findings indicates that water pollution affects the level of output per worker. This implies that a tightened pollution policy may have short-run impacts rather than the long-run.

• Item Type: MPRA Paper
• Language: English
• Keywords: Solow model; water pollution; economic growth
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C58 - Financial Econometrics; E - Macroeconomics and Monetary Economics > E0 - General; E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts; E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; G - Financial Economics > G1 - General Financial Markets; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets

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