Examining the Relationship between Environmental Quality and Globalization in Iranian Economy

Abstract

One of the most controversial issues that has attracted the attention of researchers in various fields is the relationship between environmental quality and globalization. Despite extensive research in this area, there is no consensus in this regard. In this study, discrete wavelet transform (DWT) was applied to investigate the causal relationship between the two variables of environmental quality and globalization on different horizons using Iranian economic data during the period 1960: 01-2017: 04. Based on the results, there was no relationship between the two variables in the short and medium term. In the long term, there was a two-way causal relationship between the variables, so that improving the environmental quality (reducing CO2 emissions) led to an increase in globalization (economic openness) and vice versa.