Environmental Kuznets curve in the presence of structural breaks: new evidence for individual European Countries

This study explores the relationships between carbon emissions and their main determinants such as energy consumption, real income and international trade, in 15 European countries, employing data for the period 1960-2015, and in Germany, for that of 1970-2015. The purpose of this paper is to examine the environmental Kuznets curve in subregimes in the presence of structural shifts. Two complementary unit root tests are employed to examine the stationarity of employed variables. The Ng and Perron Econometrica 69: 1519-1554 (2001) and the Zivot and Andrews J Bus Econ Stat, 10(3), 251-270 (1992) unit root tests, both allow for a structural break. To estimate the parameters of the regression model and to detect structural breaks in the model, the Kejriwal and Perron J Econ, 146(1), 59-73, (2008), J Bus Econ Stat, 28(4), 503-522, (2010a), J Time Ser Anal, 31, 305-328, (2010b)) structural break test is employed. When structural breaks are allowed in estimations, the empirical results provide strong evidence of fluctuating relationships between CO2 emissions and income expressed by the U-shape in every subregime, which contradicts early findings in the literature of inverse U-shape environmental Kuznets curve.

Is technology still a major driver of health expenditure in the United States? Evidence from cointegration analysis with multiple structural breaks

Using a longer span of available time series data and employing powerful unit root and cointegration tests that allow for multiple structural breaks, developed recently by Carrion-i-Silvestre et al. (Econ Theory 25:1754-1792, 2009), Perron and Yabu (J Bus Econ Stat 27:369-396, 2009), Kejriwal and Perron (J Econ 146(1):59-73, 2008; J Bus Econ Stat 28(4):503-522, 2010a; J Time Ser Anal 31:305-328, 2010b) and Maki (Econ Model 29:2011-2015, 2012), this paper empirically investigates, whether technology continues to be a major driver of real per capita health expenditure, along with some control variables such as per capita income and life expectancy, in the United States, during the period 1960-2012. Specifically, the paper applies the most recent cointegration tests under multiple structural breaks and extends the work of Okunade (J Health Econ 21(1):147-159, 2002) with the possibility whether a linear cointegration model with multiple structural breaks would provide a better economic model to quantify the impact of some major determinants of US real per capita health expenditure. This paper presents evidence to show that per capita real income, technology as indicated by four proxy measures and life expectancy at birth are some major drivers of real per capita health expenditure in the United States. Contrary to the available evidence in the literature, the finding of this paper is that the point aggregate income elasticity of health expenditure estimate is less than one, indicating that health care has evolved to become a necessity in the United States. Policy implications of the empirical findings are discussed in the paper.