Economic growth in South Asia: the role of CO(2) emissions, population density and trade openness

This study investigates the impact of CO(2) emissions, population density, and trade openness on the economic growth of five South Asian countries. Using data from 1990 to 2017 the panel co-integration approach of extended neoclassical growth model is used. The obtained results reveal that CO(2) emissions and population density positively and trade openness negatively affect the economic growth in South Asia. The extent of effect of population density is greater than that of CO(2) emissions. Granger causality results exhibit a bidirectional causality between economic growth and CO(2) emissions, and between trade openness and CO(2) emissions. There is a unidirectional causality running from trade openness to economic growth, from population density to CO(2) emissions and from labor to economic growth and population density. A detailed policy prescription is provided based on the findings.