The Effect of Macroeconomic Policy Uncertainty on Environmental Quality in Jordan: Evidence from The Novel Dynamic Simulations Approach

Abstract

Objectives: Over the past few years, Jordan's economy has grown rapidly, placing it prominently among the world's emerging markets and developing economies rapidly. The country is known for its diverse natural resources. However, the effects of macroeconomic uncertainty, energy intensity, and trade openness on the environment have received less attention than the environmental implications of energy generation. This research fills a significant gap in the literature by investigating the impact of macroeconomic policy uncertainty on Jordan's environmental Kuznets curve from 1970 to 2021.
 Methods: This study adopted a methodological framework to simulate dynamic distributed self-regression.
 Results: The results of the study revealed that uncertainty about the future direction of macroeconomic policy accelerates the short and long-term rate of environmental degradation; economic growth accelerates environmental degradation while the square of economic growth slows it, confirming the presence of the environmental Kuznets curve hypothesis; energy density accelerates the rate of environmental quality degradation.
 Conclusions: Jordan should adopt advanced, environmentally friendly, clean technologies that transition from fossil fuels to low-carbon renewable energy sources. The government should establish strong international partnerships for technology exchange and environmental preservation. Additionally, increasing Jordan's economic complexity is crucial for achieving its environmental development goals.