Abstract
This study delves into the intertwined relationships between demographics, biodiversity, climate change, political stability, and inequality that shaped GDP growth in 166 countries from 2000 to 2020. Combining Granger causality for panel data with causal graph design, we uncover direct and indirect effects, comprehensively assessing the causal dependencies between these dimensions. In particular, we find that extra-financial indicators can rival traditional macroeconomic variables in predicting GDP growth for low-income countries. In contrast, high-income countries benefit from the synergies of both. Impulse response functions derived from panel VAR (PVAR) models allow us to quantify both direct and indirect effects at play between demographics, biodiversity, climate change, political stability, and inequality, shedding light on the mechanisms behind economic growth and offering an investor a new lens to assess potential opportunities and risks across countries.
Authors
