Asymmetries in the nexus among energy consumption, air quality and economic growth in China

Abstract The present study aims to explore the presence of asymmetry within the relationship between energy consumption, air quality and economic growth in China by adopting the NARDL model. The findings confirm a bi-directional and asymmetric relationship in the short and long-term. The effects of positive and negative these variables shocks are various in sign and magnitude. Specifically, the impacts of positive air quality and energy consumption shocks on economic development are bigger than negative shocks. Real output is also an important asymmetric determinant of energy consumption and air quality. The relationships among the three variables are not necessary to be negative or positive, but changes over time. Further robust tests also prove the asymmetries. Thus, when making energy consumption or emissions reduction policy, authorities should consider the asymmetries to maintain economic growth stability. It is wise to increase the efficiency of using energy and construct the energy conservation industry.