As the negative repercussions of environmental devastation, such as global warming and climate change, become more apparent, environmental consciousness is growing across the world, forcing nations to take steps to mitigate the damage. Thus, the current study assesses the effect of green investments, institutional quality, and political stability on air quality in the G-20 countries for the period 2004-2020. The stationarity of the variables was examined with the Pesaran (2007) CADF, the long-term relationship between the variables by Westerlund ( 2007), the long-run relationship coe cients with the MMQR method proposed by Machado & Silva (2019), and the causality relationship between the variables by Dumitrescu & Hurlin (2012) panel causality. The study ndings revealed that green nance investments, institutional quality and political stability increased the air quality, while total output and energy consumption decreased air quality. The panel causality reveals a unidirectional causality from green nance investments, total output, energy consumption and political stability to air quality, and a bidirectional causality between institutional quality and air quality. According to these ndings, it has been found that in the long term, green nance investments, total output, energy consumption, political stability, and institutional quality affect air quality. Based on these results, policies implications were proposed.
As the negative repercussions of environmental devastation, such as global warming and climate change, become more apparent, environmental consciousness is growing across the world, forcing nations to take steps to mitigate the damage. Thus, the current study assesses the effect of green investments, institutional quality, and political stability on air quality in the G-20 countries for the period 2004–2020. The stationarity of the variables was examined with the Pesaran (2007) CADF, the long-term relationship between the variables by Westerlund (2007), the long-run relationship coefficients with the MMQR method proposed by Machado & Silva (2019), and the causality relationship between the variables by Dumitrescu & Hurlin (2012) panel causality. The study findings revealed that green finance investments, institutional quality and political stability increased the air quality, while total output and energy consumption decreased air quality. The panel causality reveals a unidirectional causality from green finance investments, total output, energy consumption and political stability to air quality, and a bidirectional causality between institutional quality and air quality. According to these findings, it has been found that in the long term, green finance investments, total output, energy consumption, political stability, and institutional quality affect air quality. Based on these results, policies implications were proposed.
This study explores the relationship between stock market inclusion and economic activity (liveliness) in Turkey by taking advantage of the recent contributions in causality theory. Stock market inclusion is represented by the seasonally adjusted real stock market trade volume per capita (TV) and economic activity by the seasonally adjusted real gross domestic product per capita (GDP). We use quarterly series covering the period 2003:1-2020:2 and employ asymmetric bootstrap and asymmetric Fourier bootstrap causality testing procedures to obtain robust parameter estimates. Both procedures adopt a nonlinear methodology but the latter is distinguished from the first in the sense that it follows a Fourier series approximation which allows for structural breaks of unknown number, form, and point. Empirical findings suggest that the Fourier-type asymmetric bootstrap causality procedure, thanks to its trigonometric components, captures two unidirectional (one-way) causalities; one running from the positive components of TV to those of GDP and the other running from the negative components of TV to those of GDP, but not vice versa. These findings verified a strong influence on GDP of the alterations i.e. positive and negative shocks in stock market conditions.
We investigate the relationship between economic policy uncertainty (EPU) and St. Louis Fed's financial stress (FS) indices for the US by using monthly data for the period 2013:1 -2019:6 and employing linear (conventional) as well as nonlinear (exponential) unit root tests; nonlinear (exponential smooth transition autoregressive-ESTAR) cointegration test initially introduced by Kapetanios, Shin, and Snell (2006) (KSS) and residual-based Fourier cointegration test suggested by Yılancı (2019); conventional and Fourier Granger causality tests as well as asymmetric causality tests. Empirical findings from these procedures can be classified into three major categories: (i) The results from the KSS and residual-based Fourier cointegration analyses confirm each other that a long-run equilibrium exists between EPU and FS. (ii) Estimations from the Fourier Granger causality test that allows for structural breaks of unknown number and form unveiled that there is a one-way causality running from FS to EPU, a finding that contrasts with the one from the conventional procedure which shows a two-way causality. (iii) Finally, the findings from the asymmetric causality testing procedure verified that while two unidirectional causalities exist running from the negative and positive components of FS to the negative and positive components of EPU, respectively; we found no evidence for such asymmetric causality running from EPU to FS. These robust findings we believe shed a bright light on a major policy suggestion. The US policy makers should design policies and regulations aiming at lessening the stress on the financial markets in order to leash the uncertainty associated with economic policies.
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