The EKC Hypothesis in Brics-4 Countries and USA : a Novel Second Generation Panel Data Analysis

This paper establishes the long run association between gross domestic product (GDP) and gross fixed capital formation (GFCF) with carbon emission (CE) in BRICS-4 countries and USA. To empirically estimate the long run cointegration and to check the validity of EKC hypothesis, the novel second-generation panel data analysis is done by taking the annual data from 1991-2020. All the variables are cross-sectionally dependent, differenced stationary, and cointegrated over the long run, according to empirical estimations of CD-LM test, CADF & CIPS tests, and Westerlund (2007), respectively. Moreover, the coefficients estimated by employing the novel DCCE approach validates the presence of the EKC hypothesis in the BRICS-4 countries and the USA. Finally, based on the empirical findings, this paper posited some valuable policy recommendations for the BRICS-4 countries and USA