Figure 2
The flowchart contains eight numbered steps, each represented as a labeled box with detailed descriptions. Arrows connect boxes in a logical sequence. Top left: “P C A (1)” leads to a blue box with the text—“HDI, C O 2 emission, life expectancy, G D P, household and government consumption”. Next step: “Variables (2)” points to an orange box—“E W, N R E, G I, I N S, I N F, F D I”. “Unit root (3)” is colored light purple—“Strict first difference [I (1)] stationary target variables. Regressors can be I (1) or I (0) but not I (2)”. “ARDL (4)” is blue—“Optimal lag selection. A R D L lag specification with error correction”. Lower left: “Bound test (5),” green—“Test the existence of long-run relationship. P S S bounds test”. “D A R D L (6),” orange—“Stochastic simulations. Counterfactual shock-graphing”. “Causality (7),” green—“Frequency Domain Causality test”. “Diagnostics (8),” grey—“Autocorrelation test. Heteroskedasticity test. Normality test. Parameter stability test”.Graphical illustration of the test processes. Source(s): Authors’ computation