The asymmetric effects of fiscal and monetary policy instruments on Pakistan’s environmental pollution

Maintaining a balance between environmental quality and economic growth is now one of the common goals of fiscal and monetary policies in developed and developing economies. This study examines the asymmetric impacts of fiscal and monetary policy instruments on environmental pollution in Pakistan ov...

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Bibliographic Details
Published in:Environmental science and pollution research international 2021-02, Vol.28 (6), p.7450-7461
Main Authors: Ullah, Sana, Ozturk, Ilhan, Sohail, Sidra
Format: Article
Language:English
Subjects:
Aquatic Pollution
Atmospheric Protection/Air Quality Control/Air Pollution
Carbon
Carbon Dioxide - analysis
Earth and Environmental Science
Economic Development
Economic growth
Economics
Ecotoxicology
Emissions
Environment
Environmental Chemistry
Environmental Health
Environmental impact
Environmental Policy
Environmental Pollution - analysis
Environmental Pollution - prevention & control
Environmental quality
Environmental science
Fiscal Policy
Monetary policy
Pakistan
Pollution
Research Article
Shock
Waste Water Technology
Water Management
Water Pollution Control
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Summary:Maintaining a balance between environmental quality and economic growth is now one of the common goals of fiscal and monetary policies in developed and developing economies. This study examines the asymmetric impacts of fiscal and monetary policy instruments on environmental pollution in Pakistan over the period 1985–2019 by employing the asymmetric or nonlinear autoregressive distributed lag (NARDL) framework. The outcomes indicate that in Pakistan, a positive and negative shock in fiscal policy instruments has a significant increasing influence on carbon emissions in the short run, while a positive and negative shock in fiscal policy instruments has a significant decreasing impact on environmental pollution in long run. However, negative and positive shock in monetary policy instruments enhances carbon emissions in short-run, whereas positive shock in monetary policy instruments decreases carbon emissions in the long run. Therefore, the policymakers may consider the usage of fiscal and monetary policy instruments to maintain economic growth along with lowering the environmental pollution.
ISSN:0944-1344
1614-7499
DOI:10.1007/s11356-020-11093-4