Electricity consumption and economic growth in Algeria: A multivariate causality analysis in the presence of structural change

This article addresses the issue of electricity consumption, petroleum price and economic growth in Algeria. The primary objective is to investigate and analyze the causal relationship between electricity consumption (EC), Brent oil price (BOP) and economic growth (GDP) for Algeria over the period of 1971–2010. To examine short-run, long-run and joint causality relationships we used a multivariate cointegration approach based on the recent advances in time series econometrics (e.g., Zivot–Andrews test; Gregory–Hansen cointegration test; Vector Error Correction Models (VECM)). The empirical results show that there is evidence of short-run and a strong long-run bi-directional causal relationship between EC and real GDP in Algeria. Findings indicate also the absence of causal relationship between BOP and EC. Our empirical findings support the idea that there a link between electricity consumption and economic growth and disproves the neo-classical assumption referred to as the “neutrality hypothesis”.     

Economic growth and electricity consumption in Cote d'Ivoire: Evidence from time series analysis

This paper examines the causal relationship between the electric power industry and the economic growth of Cote d'Ivoire. Using the data from 1971 to 2008, a test was conducted for the cointegration and Granger causality within an error correction model. Results from these tests reveal a bidirectional causality between per capita electricity consumption and per capita GDP. A unidirectional causality running from electricity consumption to industry value added appears in the short run. Economic growth is found to have great effects on electricity consumption and a reverse causality from electricity to economic growth may also appear. In the long run, there is a unidirectional causality between electricity and both GDP and industry value added. From these findings, we conclude that the country will be energy dependent in the long run and must therefore secure the production network from shortfalls to ensure a sustainable development path. Accordingly, government should adopt policies aimed at increasing the investment in the sector by stepping up electricity production from existing and new energy sources.     

Electricity consumption and economic growth: a time series experience for 17 African countries

While the availability of electricity by itself is not a panacea for the economic and social problems facing Africa, the supply of electricity is nevertheless believed to be a necessary requirement for Africa's economic and social development. This paper tests the long-run and causal relationship between electricity consumption per capita and real gross domestic product (GDP) per capita for 17 African countries for the period 1971–2001 using a newly developed cointegration test proposed by Pesaran et al. (2001) and using a modified version of the Granger causality test due to Toda and Yamamoto (1995). The advantage of using these two approaches is that they both avoid the pre-testing bias associated with conventional unit root and cointegration tests. The empirical evidence shows that there was a long-run relationship between electricity consumption per capita and real GDP per capita for only 9 countries and Granger causality for only 12 countries. For 6 countries there was a positive uni-directional causality running from real GDP per capita to electricity consumption per capita; an opposite causality for 3 countries and bi-directional causality for the remaining 3 countries. The result should, however, be interpreted with care as electricity consumption accounts for less than 4% of total energy consumption in Africa and only grid-supplied electricity is taken into account.     

Residential and non-residential electricity dynamics

This paper uses U.S. panel data to instrument and examine the dynamics of electricity within the world market while separating between both residential and non-residential electricity consumptions during the time period of 1990–2014. To better assess the true differences within each causal relationship, all panel data has been separated into one Full panel and three subpanels of High, Middle, and Low income. The empirical framework used consists of various tests that identify the existence of cross-sectional dependency, a Pesaran panel unit root test, a Westerlund panel cointegration test, and the Dumitrescu–Hurlin method of the Granger causality test. Furthermore, this paper utilizes DOLS to estimate any long-run elastic relations between real GDP and residential or non-residential electricity consumption. Based on the results, this paper determines that no long-run relationship exists between non-residential electricity consumption and economic growth throughout and that the relationship between residential electricity consumption and economic growth possesses unit elastic behavior in the long run. Other findings throughout imply causality moves from economic growth in the direction of residential electricity consumption for all panels.     

基于GDP-电能消费耦合关系的中长期电量预测

建立了一种基于用电量和GDP之间耦合关系的中长期电量预测模型。首先利用协整检验和格兰杰（Granger）因果检验,剖析电能消费和经济发展之间的协整关系和因果关系,并建立中长期电量预测模型。然后采用误差修正方法对预测模型进行短期调节,以提高模型的鲁棒性以及预测精度。以某地区1991—2015年的用电量和GDP数据作为算例输入数据,结果表明：通过构建电能消费和经济发展之间的耦合关系,有助于提高预测模型的解释能力,同时含短期调节的中长期用电量预测模型具有更高的预测精度。     

Electricity consumption and economic growth nexus in Bangladesh: Revisited evidences

In this paper, an attempt is being made to examine the causal relationship between per capita electricity consumption and per capita GDP of Bangladesh using the vector error correction specified Granger causality test to search their short-run, long-run and joint causal relationships for the period of 1971–2008. Empirical findings reveal that there is a short-run unidirectional causal flow running from per capita electricity consumption to per capita GDP without feedback. The presence of a positive short-run causality explains that an increase in electricity consumption directly affects economic activity in Bangladesh. Likewise, results from joint causality exhibit the same as in short-run. By contrast, long-run results show a bi-directional causality running from electricity consumption to economic growth with feedback. These findings can provide essential policy insights to design immediate and long-term growth prospect for Bangladesh keeping in mind its present planned growth strategy and dismal power and energy sector.     

Electricity consumption–growth nexus: The case of Malaysia

The goal of this paper is to model the relationship between electricity consumption and real gross domestic product (GDP) for Malaysia in a bivariate and multivariate framework. We use time series data for the period 1971–2003 and apply the bounds testing approach to search for a long-run relationship. Our results reveal that electricity consumption, real GDP and price share a long-run relationship. The results of the autoregressive distributed lag (ARDL) estimates of long-run elasticity of electricity consumption on GDP are found to be around 0.7 and statistically significant. Finally, in the short-run, the results of the causality test show that there is a unidirectional causal flow from electricity consumption to economic growth in Malaysia. From these findings we conclude that Malaysia is an energy-dependent country, leading us to draw some policy implications. This paper adds support and validity, thus reducing the policy makers concern on the ambiguity of the electricity and growth nexus in Malaysia.     

A dynamic panel study of economic development and the electricity consumption-growth nexus

This study examines the relationship between electricity consumption and economic growth for 88 countries categorized into four panels based on the World Bank income classification (high, upper middle, lower middle, and low income) within a multivariate panel framework over the period 1990–2006. The Larsson et al. (2001) panel cointegration test indicates there is a long-run equilibrium relationship between real GDP, coal consumption, real gross fixed capital formation, and the labor force for the high, upper middle, and lower middle income country panels. The results from the panel vector error correction models reveal (1) bidirectional causality between electricity consumption and economic growth in both the short- and long-run for the high income and upper-middle income country panels; (2) unidirectional causality from electricity consumption to economic growth in the short-run, but bidirectional causality in the long-run for the lower-middle income country panel; and (3) unidirectional causality from electricity consumption to economic growth for the low income country panel.     

The role of natural gas consumption and trade in Tunisia's output

This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in the case of Tunisia over the period 1980–2010. We use an Autoregressive Distributed Lag (ARDL) bounds testing approach to test for cointegration between the variables. The Toda–Yamamoto approach is then used to test for causality. Our findings indicate the existence of a long-term relationship between the variables. Natural gas consumption, real gross fixed capital formation and trade add in economic growth. Natural gas consumption, real gross fixed capital formation and real trade cause real GDP in Tunisia. These findings open up new insights for policymakers to formulate a comprehensive energy policy to sustain economic growth in the long-term.     

Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS)

Access to modern energy is believed to be a prerequisite for sustainable development, poverty alleviation and the achievement of the Millennium Development Goals.However, theoretical models and empirical results offer conflicting evidence on the relationship between energy consumption and economic growth that we remain largely unsure of the cause-and-effect nature of this relationship, if indeed a relationship exists at all.This paper tests, in a panel context, the long-run relationship between energy access, and economic growth for fifteen African countries from 1980 to 2008 by using recently developed panel cointegration techniques.We adopt a three-stage approach, consisting of panel unit root, panel cointegration and Granger causality tests to study the dynamic causal relationships between energy consumption, energy prices and growth as well as relationship between electricity consumption, prices and growth.Results show that GDP and energy consumption as well as GDP and electricity move together in the long-run. By estimating these long-run relationships and testing for causality using panel-based error correction models, we found unidirectional long-run and short-run causality. The causality is running from GDP to energy consumption in the short-run, and from energy consumption to GDP in the long-run. There is also evidence of unidirectional causality running from electricity consumption to GDP in the long-run.This study thus provides empirical evidence of long-run and causal relationships between energy consumption and economic growth for our sample of fifteen countries; suggesting that lack or limited access to modern energy services could hamper economic growth and compromise the development prospects of these countries.     

Energy consumption and economic growth relationship: Evidence from panel data for low and middle income countries

This paper uses the panel data of energy consumption (EC) and economic growth (GDP) for 51 countries from 1971 to 2005. These countries are divided into three groups: low income group, lower middle income group and upper middle income group countries. Firstly, a relationship between energy consumption and economic growth is investigated by employing Pedroni (1999) panel cointegration method. Secondly, panel causality test is applied to investigate the way of causality between the energy consumption and economic growth. Finally, we test whether there is a strong or weak relationship between these variables by using Pedroni (2001) method. The empirical results of this study are as follows: i) Energy consumption and GDP are cointegrated for all three income group countries. ii) The panel causality test results reveal that there is long-run Granger causality running from GDP to EC for low income countries and there is bidirectional causality between EC and GDP for middle income countries. iii) The estimated cointegration factor, β, is not close to 1. In other words, no strong relation is found between energy consumption and economic growth for all income groups considered in this study. The findings of this study have important policy implications and it shows that this issue still deserves further attention in future research.     

The causality between energy consumption and economic growth in Turkey

This paper applies the causality test to examine the causal relationship between primary energy consumption (EC) and real Gross National Product (GNP) for Turkey during 1970–2006. We employ unit root tests, the augmented Dickey–Fuller (ADF) and the Philips–Perron (PP), Johansen cointegration test, and Pair-wise Granger causality test to examine relation between EC and GNP. Our empirical results indicate that the two series are found to be non-stationary. However, first differences of these series lead to stationarity. Further, the results indicate that EC and GNP are cointegrated and there is bidirectional causality running from EC to GNP and vice versa. This means that an increase in EC directly affects economic growth and that economic growth also stimulates further EC. This bidirectional causality relationship between EC and GNP determined for Turkey at 1970–2006 period is in accordance with the ones in literature reported for similar countries. Consequently, we conclude that energy is a limiting factor to economic growth in Turkey and, hence, shocks to energy supply will have a negative impact on economic growth.     

The electricity consumption and GDP nexus for the Fiji Islands

Fiji is a small open island economy dependent on energy for its growth and development; hence, the relationship between energy consumption and economic growth is crucial for Fiji's development. In this paper, we investigate the nexus between electricity consumption and economic growth for Fiji within a multivariate framework through including the labour force variable. We use the bounds testing approach to cointegration and find that electricity consumption, GDP and labour force are only cointegrated when GDP is the endogenous variable. We use the Granger causality F-test and find that in the long-run causality runs from electricity consumption and labour force to GDP, implying that Fiji is an energy dependent country and thus energy conservation policies will have an adverse effect on Fiji's economic growth.     

Decoupling factors on the energy–output linkage: The Spanish case

The recent increase of energy intensity in Spain and the ratification of the Kyoto protocol call for the implementation of energy policies in Spain. In this paper, we investigate the relationship between Gross Domestic Product (GDP) and Energy Consumption (EC) by taking into account several decoupling factors that can affect this linkage. Specifically, we have considered the temporal aggregation of data and its seasonal adjustments, the multivariate methodology, the substitution between EC and other inputs and the technological changes. Empirical tests reveal a long-run relationship between EC and GDP that can only be established in a complete way with a multivariate cointegration analysis. Furthermore, a short-run unidirectional causality from EC to economic growth is found. Therefore, primary EC plays an important role as a limiting factor for economic growth in Spain in the short-run.     

CO2 emissions,energy consumption and economic growth in the ASEAN-5 countries: A cross-sectional dependence approach

We re-examine the relationship between CO2 emissions, energy consumption (EC) and economic growth (GDP) for the five main Association of Southeast Asian Nations (ASEAN-5) countries over the period 1980–2016. Our main contention is that the findings in previous studies that have examined the relationship between CO2, EC and GDP in the ASEAN-5 are biased because they fail to account for cross-sectional dependence (CD). We show that conventional tests applied to our dataset suggest a misleading conclusion about the Environmental Kuznets Curve (EKC) and Granger causal relationship between CO2, EC and GDP in the presence of CD. When we apply a new panel test of Granger non-causality that addresses CD and heterogeneity, we find considerable heterogeneity. We find unidirectional Granger causality running from GDP to CO2 for Malaysia, the Philippines, Singapore and Thailand; unidirectional causality running from GDP to EC in Indonesia, Malaysia and Thailand; unidirectional causality running from EC to GDP in Singapore and bidirectional causality between GDP and EC in the Philippines. We also find support for the EKC hypothesis for the ASEAN-5 countries.     

Forecast of electricity consumption and economic growth in Taiwan by state space modeling

This paper investigates the Granger causality between electricity consumption (EL) and economic growth for Taiwan during 1980–2007 using the cointegration and error-correction models. The results indicate that EL and real GDP are cointegrated, and that there is unidirectional short and long run Granger causality from economic growth to EL but not vice versa. Considering cointegrated property, this study proposes a new error-correction state space model (ECSTSP) with the error-correction term (ECT) in its state vector to forecast both EL and real GDP simultaneously, whereas the ECM is not in the state vector of classical state space model (STSP). The out-of-sample forecasting ability of the ECSTSP is compared with STSP and SARIMA models using six forecasting horizons from 1-year to 6-year. The results suggest that all of the models have strong forecasting performance with MAPE less than 5.4%, but the ECSTSPs have the smallest average values of MAPEs for both EL and GDP, which are 2.50% and 1.74%, respectively. For short-term predictions, SARIMA models are as good as STSP or ECSTSP ones. For long-term prediction, ECSTSP is the best model, because the cointegration relationship between real GDP and EL is taken into account in this model.     

Dynamic relationship between CO2 emissions,energy consumption and economic growth in three North African countries

This paper investigated the causal relationship between energy consumption (EC), carbon dioxide (CO₂) emissions and economic growth for three selected North African countries. It uses a panel co-integration analysis to determine this econometric relationship using data during 1980–2012. Recently developed tests for panel unit root and co-integration tests are applied. In order to test the Granger causality, a panel Vector Error Correction Model is used. The conservation hypothesis is found; the short run panel results show that there is a unidirectional relationship from economic growth to EC. In addition, there is a unidirectional causality running from economic growth to CO₂ emissions. A unidirectional relationship from EC to CO₂ emissions is detected. Findings shown that there is a big interdependence between EC and economic growth in the long run, which indicates the level of economic activity and EC mutually influence each other in that a high level of economic growth leads to a high level of EC and vice versa. Similarly, a unidirectional causal relationship from EC to CO₂ emissions is detected. This study opens up new insights for policy-makers to design comprehensive economic, energy and environmental policy to keep the economic green and a sustainable environment, implying that these three variables could play an important role in the adjustment process as the system changes from the long run equilibrium.     

The relationship between pollutant emissions,renewable energy,nuclear energy and GDP: empirical evidence from 18 developed and developing countries

This document investigates the causal relationship between nuclear energy (NE), pollutant emissions (CO₂ emissions), gross domestic product (GDP) and renewable energy (RE) using dynamic panel data models for a global panel consisting of 18 countries (developed and developing) covering the 1990–2013 period. Our results indicate that there is a co-integration between variables. The unit root test suggests that all the variables are stationary in first differences. The paper further examines the link using the Granger causality analysis of vector error correction model, which indicates a unidirectional relationship running from GDP per capita to pollutant emissions for the developed and developing countries. However, there is a unidirectional causality from GDP per capita to RE in the short and long run. This finding confirms the conservation hypothesis. Similarly, there is no causality between NE and GDP per capita.     

Does electricity consumption panel Granger cause GDP? A new global evidence

The goal of this paper is to undertake a panel data investigation of long-run Granger causality between electricity consumption and real GDP for seven panels, which together consist of 93 countries. We use a new panel causality test and find that in the long-run both electricity consumption and real GDP have a bidirectional Granger causality relationship except for the Middle East where causality runs only from GDP to electricity consumption. Finally, for the G6 panel the estimates reveal a negative sign effect, implying that increasing electricity consumption in the six most industrialised nations will reduce GDP.     

Oil consumption and economic growth: Evidence from Pakistan

This study attempts to look into the causal relationship between oil consumption and economic growth in Pakistan where oil consumption and real gross domestic product (GDP) have increased rapidly in recent years. To this end, the study employs annual data covering the period 1965–2015. Tests for unit roots, co-integration, and Granger causality based on the error-correction models (ECMs) are presented. The overall results support the existence of bidirectional causality between oil consumption and economic growth in Pakistan. This means that an increase in oil consumption directly affects economic growth. Thus, in order not to cause an adverse effect on economic growth, Pakistan should endeavor to overcome the constraints on oil consumption. Moreover, it appears that economic growth induces increased oil consumption.