Investigation of the Causal Relationships between Economic Development and Combustible Renewables and Waste Consumption in Central Asian Countries

Abstract

This study examines the relationships between Foreign direct investment (FDI), Gross domestic product (GDP), Trade, Inflation, Labor force, Population density, Combustible renewables and waste consumption for the case of Central Asia, spanning the period 1990 to 2020. The combustible renewables and wastes consumption in Central Asia are based on the long run and short run relationship between economic development with the Error Correction Model (ECM) based Panel Cointegration tests and Panel Vector Error Correction Model (VECM) Granger causality test tried to explain using the causality test, spanning the period 1990 to 2020. An empirical analysis uses the Im, Pesaran, and Shin (CIPS) Panel Unit Root test and Westerlund ECM to test the basics of the data unit based on this information. The Panel Vector Autoregression (PVAR) specification was based on the results of the Lag-order selection criteria, and the stability of the PVAR model was checked through the observation of the Hausman test and Eigenvalue stability condition. It performs tests to verify the existence of the long run relationships among the variables and examines short and long run causal relationships. It finds that increased combustible renewables and waste consumption use is the main cause of increased economic growth.