The Dynamic Relationship between Carbon Emissions and Economic Growth in China

摘要

The relationship between economic growth and carbon emissions has become a hot issue of research. We use the dynamic correlation multivariate stochastic volatility model to study the dynamic relationship between carbon emissions and the economic growth. We firstly exam the co-integration and Granger causality relation. We find that they have a long-term stable relationship and the economic growth is the Granger cause of carbon emissions. We then use DC-MSV model to recover the time-varying correlation coefficient between Chinese GDP. We find that the correlation coefficient is very high and has great time-varying property. Lastly we use the time-varying correlation coefficient to forecast Chinese green economic growth rate and has great forecast power.