Consequences of COVID-19 on the social isolation of the Chinese economy: accounting for the role of reduction in carbon emissions

Abstract

The main contribution of the present study to the energy literature is to explore the relationship between economic growth and pollution emission amidst globalization. In contrast to the existing studies, this research examines the effects of economic and social isolation as dimensions of globalization. The present paper allows underpinning the impact on the Chinese economic development of the isolation phenomenon as a consequence of coronavirus (COVID-19). To this end, annual time-frequency data is used to achieve the hypothesized claims. The study resolutions include (1) the existence of a long-run association between the outlined variables; (2) the long-run estimates suggest that the Chinese economy, over the investigated period, is inelastic to pollutant-driven economic growth; and (3) the Chinese isolation is less responsive to its economic growth while the country political willpower is elastic as demonstrated by a government commitment to dampen the effect of the COVID-19 pandemic. This confinement is marked by the aggressive response by the government officials resolute by flattening the exponential impact of the pandemic. Based on these robust results, some far-reaching policy implications are underlined in the concluding remarks section.