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- Economic growth, sustainable development and food consumption: Evidence across different income groups of countriesPublication . Marques, António Cardoso; Fuinhas, José Alberto; Pais, Daniel FranciscoConsidering that high population and income growths will lead the coming decades, an increase in global food demand is expected. Livestock products, such as meat, are closely related to this trend, but also associated with impacts on the environment and public health, from land and water depletion, to greenhouse gases emissions and higher risks of non-communicable diseases. This trend raises doubts about the sustainability of the food industry and thus a solution is needed for the problem. How to feed the world population without compromising present and future generations. The literature suggests that meat consumption should be reduced for the sake of the environment and global population, however without considering the effects that such reduction would have on the economy. Inspired by these facts, this paper empirically analyses the interactions between food consumption, economic growth and sustainable development (measured by the Index of Sustainable EconomicWelfare). More specifically the paper assesses the effect that food consumption has on the economy. The econometric analysis applies the Autoregressive Distributed Lag model for 77 countries, further distinguished by their income group, from 1995 to 2013. The findings support that meat consumption has different impacts on economic growth and sustainable development considering different income groups. However, there is an evident dilemma between economic growth and sustainable development since meat consumption has contradictory effects on each. Thus, it is crucial to understand how to promote sustainability, i.e., reducing the environmental externalities and chronic health diseases, without compromising economic growth.
- On the Relationship of Energy and CO2: The Effect of Financial Deep on Oil Producing CountriesPublication . Lopes, Mónica Alexandra; Fuinhas, José Alberto; Marques, António CardosoThe relationship between energy and carbon dioxide (CO2) emissions and the financial depth was appraised within a panel of thirteen oil producing countries. The role of CO2 is analysed as economic growth driver and as explained variable. An Autoregressive Distributed Lag model with annual frequency data for the period from 1970 to 2012 was used. The paper showed that CO2 promotes economic growth in the short-run. The CO2 causes growth in longand short-run. The ratio between oil production and primary energy consumption impacts economic growth and the reduction of CO2 in long- and short-run. The financial depth increases CO2 in short-run and depresses economic growth both in long- and short-run. The results for oil producing countries reveal bidirectional causality between CO2 and economic growth. Therefore, policymakers of oil producing countries should be aware that economic growth may lead to an increase of CO2.
- The traditional energy-growth nexus: A comparison between sustainable development and economic growth approachesPublication . Gaspar, Jorge dos Santos; Marques, António Cardoso; Fuinhas, José AlbertotGross Domestic Product (GDP) is the indicator commonly used to measure economic growth and sus-tainable development. However, this indicator can be very inefficient for evaluating development. Themost prominent alternative indicator is the Index of Sustainable Economic Welfare (ISEW). Indeed, thisindex can be used to control for the way that countries use available resources, balancing ecologicaldevelopment, damages caused to the environment and income distribution between citizens. This papercompares a sustainable development approach, using the ISEW, with the traditional economic growthapproach using GDP, and its relationship with energy consumption. The traditional hypotheses of theenergy-growth nexus are tested through Panel-Corrected Standard Errors estimators, for a panel consti-tuted by twenty European countries, with an annual data frequency for the time span 1995–2014. Theresults indicate a new negative feedback hypothesis for the alternative measure of development anda conservative hypothesis for economic growth with energy consumption. This study also finds vari-ous other effects on sustainable development by economic growth factors, such as Terms-of-trade andRents from natural resources. These findings indicate that the economic growth approach, widely stud-ied using GDP, has been wrongly interpreted by policy makers trying to achieve increased sustainabledevelopment.
- The impact of globalization and economic freedom on economic growth: the case of the Latin America and Caribbean countriesPublication . Santiago, Renato; Fuinhas, José Alberto; Marques, António CardosoThis study examines the impacts of globalization and economic freedom on the economic growth of a group of 24 developing countries from the Latin America and Caribbean over a time span ranging from 1995 to 2015. We have constructed two models, one with the globalization’s overall value and another with the political, social and economic dimensions of globalization. Our results point out to the fact that globalization has had a positive impact on the economic growth of these countries in the long-run, as well their economic and social dimensions. Still, the political dimension of globalization did not show any statistically significant effect upon growth. In addition, we have found evidence of a negative impact resulting from economic freedom on the economic growth of these Latin American and Caribbean countries in the long-run. In the short-run, the results have indicated that electric power consumption (in all estimations) and social globalization (in only one estimation) were able to promote the economic growth of these countries. Finally, the negative and significant coefficient of the error correction mechanism in all estimations points out to the presence of cointegration/long-memory relationships between the variables. This study aims to contribute to the enrichment of the globalization- growth and economic freedom-growth literature in the way that it attempts to overcome some of the flaws identified in previous studies. In our analysis we have identified and corrected the presence of outliers, which are quite often neglected, and if not controlled can actually compromise the macro-economic analysis of this region. The results from this study should primarily contribute to guide policymakers in their decisions, thus helping them to draw growth-promoting policies in their respective countries.
- Is renewable energy effective in promoting growth?Publication . Marques, António Cardoso; Fuinhas, José AlbertoThis paper applies panel data techniques to analyze the role of the various energy sources in economic growth, for a set of 24 European countries (1990-2007), controlling for energy consumption and energy dependency. The results suggest that the negative effect of the use of renewables supplants the positive effect of creating income by exploiting a natural resource locally, and thus growth does not appear to improve with the change towards renewables. The high costs of promoting renewables are probably being placed excessively upon the economy, namely by increasing the costs of electricity tariffs, thus inducing a deceleration in economic activity. Fossil fuels lead to dissimilar effects on growth while natural gas does not appear to be relevant in explaining growth. Coal hampers the capacity for growth, whereas the use of oil stimulates that growth. This is in line with productive structures that are deeply grounded in fossil fuels, particularly oil.
- On the Nexus of Energy Use - Economic DevelopmentPublication . Marques, António Cardoso; Fuinhas, José Alberto; Gaspar, Jorge dos SantosGross Domestic Product (GDP) is inefficient for evaluating sustainable development, and the most suitable indicator for this is the Index of Sustainable Economic Welfare (ISEW). This paper focuses on distinguishing the ISEW from GDP, mainly through the study of the energy consumption - economic growth nexus. The traditional hypotheses were tested using a Panel-Corrected Standard Errors estimator for twenty-two countries for the time span from 1995 to 2013. The findings show substantial differences between GDP and ISEW. This paper contributes to the discussion about the consequences of these two approaches for the design of suitable policies for a sustainable future.
- An ARDL Approach to the Oil and Growth NexusPublication . Fuinhas, José Alberto; Marques, António CardosoIn the literature, the causal relationship between oil consumption and economic growth has been poorly studied. Portugal is a medium-sized economy, which has experienced several episodes that make it of particular interest in the study of periods of economic expansion and stagnation. Portugal is constrained by external energy dependency and, due to international commitments, it is also faced with energy preservation policies that may have deep implications to its economic growth. This article examines the causal nexus between economic growth and oil consumption in Portugal, using the ARDL bounds test approach with annual time series data from 1965 to 2009. Results suggest that oil consumption causes growth in the long run and short run, and growth causes oil consumption in the long run and short run. Therefore, an energy policy that reduces oil consumption puts a slight constraint on gross domestic product growth, but growth strongly contributes to heightening Portugal’s oil dependence.
- Does the stock market cause economic growth? Portuguese evidence of economic regime changePublication . Marques, Luís Miguel; Fuinhas, José Alberto; Marques, António CardosoThe relationship between stock market and economic growth is tested for Portugal (1993–2011), which is a small open economy dependent on bank financing. The relationship between economic growth and bank financing is also appraised. Using Vector Autoregressive (VAR) modeling, Granger causality, variance decomposition and impulse response function are discussed. The physical replacement of the currency, as a consequence of the integration in the European Monetary Union, proves to be an economic regime change. The effect of the subprime crisis was also proved. There is evidence of Granger bidirectional causality between the stock market and economic growth. Meanwhile, there was no evidence of causality running from bank financing to economic growth.