Does financial instability increase environmental pollution in Pakistan?

The present aims to explore the relationship between financial instability and environmental degradation within multivariate framework using time series data for the period1972-2009 in case of Pakistan. The long run relationship is investigated by ARDL bounds testing approach to cointegration, and error correction method is applied to examine short sun dynamics. The stationarity properties of the variables are tested by applying Saikkonen and Lütkepohl (2002)structural break unit root test. Empirical evidence confirms the existence of long run relationship while financial instability increases environmental pollution in the country