Empirical evidence of sustainable development: Causality relationship between economic growth and environmental degradation in Ecuador and Latin America and The Caribbean

Abstract

This article is an inductive argumentation and an empirical-analytical paradigm that evaluates the actual relationship between Gross Domestic Product (GDP) per capita and the Carbon Dioxide (CO₂) in the case of Ecuador and to compare it with Latin America and the Caribbean within a period of analysis from 1960 to 2011. It was developed an Augmented Dickey-Fuller unit root (ADF), a Granger Causality Test and a Johansen Cointegration test. It was obtained a VAR model with two variables with a number of 14 lags – VAR2(14) which were tested for which were tested for causality by demonstrating a bidirectionality for Latin America and the Caribbean and a unidirectionality of GDP per capita to CO₂ for the Ecuador.

Keywords: economic growth, sustainable development, environmental economics.

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