Pollution, energy and growth: Evidence from post-communist countries

Abstract

This paper investigates the empirical relationship between carbon dioxide emissions, economic growth and energy use in post-communistic countries during 1990-2018. Pedroni’s (1999) panel cointegration test discovered cointegrating relationship between the variables. To distinguish short-and long-term effect, as well as to account for homogeneity caused by previous common socio-political system and current country specific characteristics, Pesaran’s et al. (1999) Pooled Mean Group estimator is employed. PMG estimates identified short-and long-term relationship between energy use and CO2 emissions and short-term relationship between CO2 emissions and economic growth. Finally, the Dumitrescu and Hurlin’s (2012) Granger non-causality test for heterogeneous panels revealed bidirectional causality between CO2 emissions, energy use and economic growth.