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The causal impact of economic growth on material use in Europe

Artikel i vetenskaplig tidskrift
Författare Florian Flachenecker
Paolo Agnolucci
Magnus Söderberg
Publicerad i Journal of Environmental Economics and Policy
Volym 6
Nummer/häfte 4
Sidor 415–432
ISSN 2160-6544
Publiceringsår 2017
Publicerad vid Företagsekonomiska institutionen, Industriell och Finansiell ekonomi & logistik
Sidor 415–432
Språk en
Länkar dx.doi.org/10.1080/21606544.2017.13...
Ämnesord Decoupling, domestic material consumption, economic growth, instrument, storm
Ämneskategorier Nationalekonomi

Sammanfattning

Several scholars and policy makers have claimed that Europe, and Western Europe in particular, has managed to ‘decouple’ economic growth from material use. We identify and address one major limitation in the existing literature – failure to take the endogeneity of economic growth into account. Based on a panel data set of 32 European countries from 2000 to 2014, we estimate the causal impact of gross domestic product (GDP) on domestic material consumption (DMC) applying an instrumental variable approach. We use the number of storm occurrences as an instrument for GDP, which we show is both relevant and valid. Our results provide new evidence that increasing the GDP growth rate causes the DMC growth rate to increase for Western Europe, whereas the effect is insignificant for the Eastern European economies and Europe as a whole. As our results partly question current wisdom on the achievements of ‘decoupling’, especially among European policy makers, we offer two explanations that are consistent with these results.

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