Circular Economy, The Role Of Economic Policy And Ecological Resource Management In View Of Ecological Footprint: Evidence From Developed Countries

Abstract

The study examines the influence of economic policy uncertainty on environmental degradation through the ecological footprint of 24 developed countries. The research utilizes panel data collected from the World Development Indicators and the Extended Economic Policy Uncertainty Index from 1999 to 2018 using the Random Effects model. This model is specialized for regressing panel data to analyze non-linear relationships. Importantly, the study concurrently investigates the relationships among specific regions, namely Asia, Europe, and the Americas. The research findings reveal a general trend among countries facing economic policy uncertainty, where job reduction corresponds to environmental degradation in various ways. However, when considering specific regions, significant differences in outcomes exist, depending on the natural characteristics and policies of the respective countries within that region. Additionally, the study identifies the existence of the Kuznets curve through a new measure, the Ecological Footprint, albeit with certain differences among regions. Therefore, the study proposes policy implications tailored to the unique characteristics of each country and geographic region to optimize natural resource conservation efforts.