Abstract
Maintaining a balance between environmental quality and economic growth is now one of the common goals of fiscal and monetary policies in developed and develo** 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.
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The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.
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Sana Ullah and Sidra Sohail analyzed the data and wrote the complete paper. Ilhan Ozturk read and approved the final version.
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Ullah, S., Ozturk, I. & Sohail, S. The asymmetric effects of fiscal and monetary policy instruments on Pakistan’s environmental pollution. Environ Sci Pollut Res 28, 7450–7461 (2021). https://doi.org/10.1007/s11356-020-11093-4
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DOI: https://doi.org/10.1007/s11356-020-11093-4