Applying a mixed frequency vector autoregressive (MF-VAR) approach, we examine relationships betweenCO2 emissions and economic growth from 1970Q1 to 2019Q4 among G7 countries. We incorporate primary energy consumption as a control variable, to avoid any bias from an omitted variable. Our empirical results, using forecast error variance decomposition and a Granger causality check, suggest MF-VAR exhibits better explanatory ability over the more commonly used VAR model employing single frequency data. Results from LF-VAR exhibit a feedback loop connecting economic expansion and emissions of CO2 with one-way Granger causality from primary energy consumption to growth of the economies studied. MF-VAR model results also indicate, in G7 countries, economic expansion exhibits a one-way causal link to CO2 emissions in Canada, UK, and US cases. Interestingly, MF-VAR shows feedback between economic expansion and primary energy use in Germany, while LF-VAR quantifies the link from economic growth to CO2 emissions in Canada and from CO2 to economic growth in the UK. Results raise implications for the G7 samples’ policy makers.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.