Does natural resource cause equitable development or resource curse? An analysis of macroeconomic policies for reducing environmental degradation

Abstract

The “resource curse” phenomenon has been identified as the biggest obstacle to socially equitable development in the Global South, such as China's new normal stage. The current study examines China's fiscal and monetary strategies from 1990 to 2021 to mitigate environmental degradation. Notably, limited studies have examined the connection between the fiscal-monetary mixture and the quality of the environment. For the empirical evaluation, ARDL and ARDL bounds tests were used to examine short- and long-run correlation and connection. The unit root is computed via the augmented Dicky Fuller technique. Additionally, a model for error correction is employed for long-term convergence. Based on the study results, it has been demonstrated that although renewable energy consumption improves the natural environment, the government's spending and the discounting rate have a detrimental effect. Accordingly, the study provides policymakers with new perspectives concerning rapid growth strategies that take advantage of natural resources.