Gail Cohen, João Tovar Jalles, Mr. Prakash Loungani, Ricardo Marto, and Gewei Wang
We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat lower for consumption-based emissions than for production-based emissions, providing mild evidence consistent with the “pollution haven” hypothesis. The Kuznets elasticity is much lower for the last three decades than for the three previous decades, suggesting a longer-term trend toward decoupling as China has become richer. Further evidence of this comes from provincial data: richer provinces tend to have smaller Kuznets elasticities than poorer ones. In addition to the trend relationship, we find that the Environmental Okun's Law holds in China.
IMF, notably under the Poverty Reduction and Growth Facility (PRGF).
This paper analyzes the impact of income inequality on growth, in addition to testing the validity of the Kuznetscurve, according to which income inequality rises with per capita income to a certain level and declines thereafter. It also examines the relationship among economic growth, income distribution, government spending, and poverty reduction. The paper attempts to respond to the following questions:
Is inequality harmful for growth? Is inequality related to the level of per capita income
Mr. Christian Bogmans, Lama Kiyasseh, Mr. Akito Matsumoto, Mr. Andrea Pescatori, and Gian Maria Milesi Ferretti
energy are tightly connected then to reduce primary energy’s consumption we may have to forfeit income growth. 2
An analog question—whether environmental concerns could pose limits to growth—was already posed in the context of local pollution more than two decades ago ( Grossmann and Krueger 1995 and Stokey 1998 ). In that context, an inverted U-shaped relation between income and pollution was found which became known as the environmental Kuznetscurve (EKC), see Selden and Song (1994) . 3 The empirical evidence for the EKC, however, was later disputed
This paper examines the empirical relationship between inequality and growth, and analyzes the impacts of growth, inequality, and government spending on poverty reduction. A new panel dataset has been assembled on inequality and poverty that reduces measurement error and ensures comparability across countries and over time. The empirical results in this paper challenge the belief that income inequality has a negative effect on growth and confirm the validity of the Kuznets curve. Credit market imperfections in low- and medium-income countries are identified as the likely reason for the positive link between inequality and growth over the short-to-medium term. In the long term, inequality may have an adverse impact on growth.