Economic growth in South Asia: the role of CO2 emissions, population density and trade openness

Abstract

This study investigates the impact of CO 2 emissions, population density, and trade openness on the economic growth of five South Asian countries. Using data from 1990 to 2017 the panel co-integration approach of extended neoclassical growth model is used. The obtained results reveal that CO 2 emissions and population density positively and trade openness negatively affect the economic growth in South Asia. The extent of effect of population density is greater than that of CO 2 emissions. Granger causality results exhibit a bidirectional causality between economic growth and CO 2 emissions, and between trade openness and CO 2 emissions. There is a unidirectional causality running from trade openness to economic growth, from population density to CO 2 emissions and from labor to economic growth and population density. A detailed policy prescription is provided based on the findings.

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