Climate Change, Cereal Production and Economic Growth: An Application of Generalized Method of Movement (GMM)

Sana Iftikhar; Muhammad Abdul Quddus

Authors

Sana Iftikhar The author is a PhD Scholar at Department of Economics, National College of Business Administration & Economics, Lahore Author
Muhammad Abdul Quddus The author is the Head of Department, Department of Economics, National College of Business Administration & Economics Author

Keywords:

climate change, cereal production, economic growth, generalized method of moment

Abstract

Developing countries like Pakistan, India and Bangladesh shares various common challenges in addressing existing and future
climate hazards. This study examines the impact of climate change and cereal production on economic growth in Pakistan, India and Bangladesh for the period 1971–2013. The variables employed in the study are carbon dioxide emissions, methane emissions, nitrous oxide emissions, total greenhouse gases emissions, cereal production and GDP growth rate. Generalized method of moments (GMM) analysis is used to evaluate different equations in relation to climatic factors and cereal production with economic growth in Pakistan, India and Bangladesh. The results show that effects of climate change variables have negative relationship with economic growth both in case of Pakistan and India. While the situation is different in case of Bangladesh. Carbon dioxide emissions and methane emissions are positively while nitrous oxide emissions and total greenhouse gases emissions are negatively related with economic growth. There is need to overcome the problem of climate change by expanding climatic and agricultural research to improve the economic situation of a country.