This paper critically assesses the literature on the relationship between economic integration and the environment. In particular, we investigate how trade liberalisation and capital market integration affect environmental policy and thus environmental quality. Conversely, we also study how...

We demonstrate that the correlation of saving and investment is measured best by an error correction model (ECM), because theory implies a cointegrating relation between these variables. The ECM comprises all previous specifications as special cases, which are shown to be potentially...