Assessing the macroeconomic impacts of green performance in a developing economy: evidence from Tunisia

This paper examines the macroeconomic effects of of Tunisia’s Green performance from 1990 to 2022 using a novel, machine learning-based Green Index and a Structural Vector Autoregression (SVAR) framework identified through recursive Cholesky decomposition. More precisely, the analysis examines how structural environmental shocks propagate through a system comprising GDP growth, inflation, unemployment, and the current account balance. The results reveal an asymmetric transmission pattern. Environmental improvements generate persistent disinflationary effects and gradually strengthen the current account balance. By contrast, effects on GDP growth and unemployment remain limited in the short run, suggesting that growth and employment benefits materialise only gradually and require complementary structural reforms. These findings position environmental performance as a structural determinant of macroeconomic resilience, supporting the integration of environmental objectives into Tunisia’s broader macroeconomic strategy.