A cointegrating polynomial regression analysis of the material Kuznets curve hypothesis

Abstract

Employing consumption data for aluminum, lead and zinc for eight OECD countries spanning from 1900 to 2006, this paper tests the hypothesis underlying the notion of the Material Kuznets Curve (MKC), which postulates an inverted U-shaped relationship between a country’s level of economic development and its intensity of metal use. Applying the tests and estimation techniques for nonlinear cointegration developed by Saikkonen and Choi (2004),Wagner (2013) as well as Wagner and Hong (2016), we find that the MKC hypothesis is less strongly supported by the data than when employing the standard methods that have been used in the empirical Environmental Kuznets Curve (EKC) literature so far. The evidence for a cointegrating MKC is mixed, at best.