Bootstrap rolling window estimation approach to analysis of the Environment Kuznets Curve hypothesis: evidence from the USA

Abstract

This study aims to examine the validity of inverted U-shaped Environmental Kuznets Curve by investigating the relationship between economic growth and environmental pollution for the period from 1966 to 2013 in the USA. Previous studies based on the assumption of parameter stability and obtained parameters do not change over the full sample. This study uses bootstrap rolling window estimation method to detect the possible changes in causal relations and also obtain the parameters for sub-sample periods. The results show that the parameter of economic growth has increasing trend in 1982–1996 sub-sample periods, and it has decreasing trend in 1996–2013 sub-sample periods. Therefore, the existence of inverted U-shaped Environmental Kuznets Curve is confirmed in the USA.