The Environmental Kuznets Curve for Green House Gases- Causality structures
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The inverted U shaped hypothesis between various indicators of environmental degradation and income per capita otherwise known as the Environmental Kuznets Curve (EKC) has gained immense popularity over the past twenty years. Cross-country panel data methods are generally adopted to study the relationship amongst the variables of interest with a possible drawback being that a certain causality structure is presumed to be true. The Directed Acylical Graph technique reveals the underlying causal structure amongst variables. This could aid in the selection of a better regression model.