Environmental Taxes and Economic Growth:Evidence from Panel Causality Tests


Morley, B. and Abdullah, S., 2010. Environmental Taxes and Economic Growth:Evidence from Panel Causality Tests. Working Paper. Bath, U. K.: Department of Economics, University of Bath. (Bath Economics Research Working Papers; 04/10)

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    The aim of this study is to determine the causal relationship between environmental taxes and economic growth, using different measures of environmental taxes with GDP as well as adjusted net savings. A panel of European countries and a separate panel of OECD countries are used from 1995 to 2006 and the standard Granger noncausality approach is applied, using panel cointegration and a dynamic panel technique to estimate the error correction models. The results suggest some evidence of long-run causality running from economic growth to increased revenue from the environmental taxes, with also some evidence of short-run causality in the reverse direction. However overall there is little evidence to support the double dividend theory.


    Item Type Reports/Papers (Working Paper)
    CreatorsMorley, B.and Abdullah, S.
    Uncontrolled Keywordscausality,double dividend,environmental taxes,economic growth,granger
    DepartmentsFaculty of Humanities & Social Sciences > Economics
    Research CentresBath Economics Research
    ID Code18528
    Additional InformationID number: 04/10


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