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Analyzing Environmental Models in the Context of International Trade and Investment: A Review of Literature

Vol 7 , Issue 2 , July - December 2020 | Pages: 174-185 | Review paper  

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Author Details ( * ) denotes Corresponding author

1. * Neha Arora, Assistant Professor, Department of Economics, International School of Business & Media, Pune, India (

The relationship between Economic Growth and Environmental Quality has long been a controversial debate. Various studies have examined the relationship between economic growth and environmental degradation through the Environmental Kuznets Curve (EKC). This paper presents an updated literature survey on pollution-growth nexus via the three environmental models i.e. IPAT model, EKC hypothesis and PHH hypothesis both from theoretical and empirical perspective. The paper also presents a comparative overview of developing and developed countries across the world in shaping the relationship between economic growth and environmental degradation via review of literature on EKC and PHH Hypothesis. Results show that pollution-growth nexus in context of EKC and PHH hypothesis differs across countries, however PHH is more evident in case of developing countries.  Also, the level of environmental quality varies across countries depending on stringent environmental regulations imposed by developing countries.


IPAT model; Environmental Kuznets Curve; Pollution Haven Hypothesis; Economic Growth.

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