Climate Change-Trade Openness- Financial Depth Index-Economic Growth Nexus: A Study of G-20

Abstract

This study examines the impact of climate change, which is seen as an environmental problem but has the power to affect the economic and financial structure, of trade openness, economic growth, and depth of financial markets in G-20 countries between 1980 and 2020. It has been concluded that the variables can be used as a policy tool in this context, where the development of trade openness and financial depth in the G-20 countries, which account for 80% of global trade, has the effect of reducing climate change by creating environmentally friendly economic growth. Panel Var and Holtz-Eakin, Newey, and Rosen GMM Estimator method were used in the study. In addition, it has been determined that action-response functions have an effect on the variables in the face of a shock to the carbon dioxide emission variable.