Causality between Energy Consumption and GDP: Evidence from 30 OECD and 78 Non-OECD Countries

Energy arguably plays a vital role in economic development. Hence many studies have attempted to test for causality between energy and economic growth; however, no consensus has emerged. This paper, therefore, tests for causality between energy and GDP using a consistent data set and methodology for 30 OECD and 78 non-OECD countries. Causality from aggregate energy consumption to GDP and GDP to energy consumption is found to be more prevalent in the developed OECD countries compared to the developing non-OECD countries; implying that a policy to reduce energy consumption aimed at reducing emissions is likely to have greater impact on the GDP of the developed rather than the developing world.Energy; GDP; Development; Causality; Modelling

Causality between Energy Consumption and Economic Growth in the Presence of Growth Volatility: Multi-Country Evidence

Falling energy intensity (increasing efficiency) is believed to be a result of more efficient production methods that have evolved over time, indicating overall sustainability in the production process. The objective of this study is to investigate the diminishing trend of energy intensity and the related volatilities in growth of energy consumption and income growth through the energy–growth nexus. The country specific long-run and short-run causal relationships among real energy consumption per capita, real GDP per capita, and the volatilities of growth in income and the growth in energy consumption are established using the method proposed by Yamamoto–Kurozumi within a cointegration framework in 48 countries. The overall findings suggest that energy intensity is falling, in conjunction with the existing evidence on the energy–growth nexus in most of the countries studied; hence, implicitly this confirms sustainability. The results based on volatility analysis show a significant decrease in energy use in response to increasing income growth volatility. The negative effects of income growth volatility on energy consumption are usually countered through compensation measures, with subsidies provided to households and producers in order to smooth the energy consumption behaviours in those economies

Revisiting the Electricity Consumption-Growth Nexus for Portugal: Evidence from a Multivariate Framework Analysis

The aim of present paper is to re-investigate the long-run and causal relationship between electricity consumption, income, financial development, population and foreign trade in Portugal using the bounds testing approach to cointegration within the unrestricted error-correction model (UECM). The Granger causality test within the Vector Error-Correction Model (VECM) was conducted to examine the direction of causality. This study covered the annual sample of 1971 to 2009. Our empirical evidence supports the presence of a long-run relationship between the variables in Portugal. Moreover, the results indicate that increase in real income, financial development, population and foreign trade has positive impact on electricity consumption in Portugal. In addition, the overall Granger causality results exhibit bi-directional causal relationship between electricity consumption, real income, and population while uni-directional causality is running from financial development to electricity consumption. In this respect, Portugal is an energy dependent country, thus energy conservation policy (growth policy) may adversely affect the economic growth (environment or pollution) in Portugal. Ultimately, the Portuguese government should encourage research and development on technological innovation for energy savings without affecting economic development in Portugal.Causality; electricity consumption; financial development; Portugal

Causality between Energy Consumption and Economic Development: Empirical Evidence from Morocco

A handful number of contributions have been trying to find a proper modeling strategy that captures the true dynamic relationship between energy consumption and economic development in different economies, but none of them targeted Morocco. The relationship between these latter variables have been the point of interest of many economists, as they provide solid insights and guidance to policy makers related to monitoring the use of energy as well as the preparation of new energy infrastructures to meet the existing demand for the different existing consumers. For this, the following contribution determines this relationship using Granger causality test, and empirical findings shows that Morocco supports the conservation hypothesis, meaning that the only causal link is unidirectional and goes from GDP to energy consumption

Causality between Energy Consumption and Economic Development: Empirical Evidence from Morocco

A handful number of contributions have been trying to find a proper modeling strategy that captures the true dynamic relationship between energy consumption and economic development in different economies, but none of them targeted Morocco. The relationship between these latter variables have been the point of interest of many economists, as they provide solid insights and guidance to policy makers related to monitoring the use of energy as well as the preparation of new energy infrastructures to meet the existing demand for the different existing consumers. For this, the following contribution determines this relationship using Granger causality test, and empirical findings shows that Morocco supports the conservation hypothesis, meaning that the only causal link is unidirectional and goes from GDP to energy consumption

Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania

The paper empirically analyzes, in the Romania’s case, the cointegration and causality between electricity consumption, capital and economic growth. The data set is covering the period 1980 - 2008. The results show the existence of bidirectional causality between electricity consumption and economic growth and between economic growth and capital use. In the same time, a unidirectional causal relation is also found from capital use to electricity consumption. The main finding suggests that electricity conservation policies may retard economic growth by reduction in electricity consumption. Moreover, in the opposite direction, from economic growth to electricity consumption, the fluctuations in economic growth may reduce demand for electricity.Electricity Consumption, Growth, Cointegration

A causal relationship between energy consumption and economic growth in Nepal

In the present paper, an attempt is made to examine the causal relationship between the per capita consumption of coal, electricity, oil and total commercial energy and the per capita real gross domestic product (GDP), using a co-integration and vector error correction model. The increase in real GDP, among other things, indicates a higher demand for a large quantity of commercial energy such as coal, oil and electricity. This implies that low infrastructure development limits the usage of commercial energy, which may also hold back economic growth. Empirical findings reveal that there is a unidirectional causality running from coal, oil and commercial energy consumption to per capita real GDP, whereas a unidirectional causality running from per capita real GDP to per capita electricity consumption is found. It is suggested that the input of per capita energy consumption stimulates enhanced economic growth in Nepal.

The Relationship Between Electricity Consumption, Real GDP And Employment In G-7 Countries: Seasonal Panel Unit Roots And Cointegration Model

The energy sector unarguably play a crucial role economic growth and employment in developed countries. The changes in energy use, particulary electricity consumption, are often correlated with changes in macro economic variable such as economic development, labor market, investment.  This paper aims to reveal the relationship between electricity consumption and macroeconomic variables by using new techiques for seasonal unit root test for panel data. At first, we have applied the HEGY-IPS test which is the presence of seasonal panel unit root test. Secondly, we have investigated the relationship between electricity consumption, income and employment in G-7 countries using seasonal cointegration analysis which is called EGHL-type test over the period of 1995:q1 to 2013:q3. The results of this study show that all variables have unit root at zero frequency and electricity consumption and employment series have seasonal unit roots at semi-annual and annual frequencies for each countries. Besides that, there exists seasonal panel unit roots in electricity consumption and employment series excepted income series. These results indicate that the series are possibly cointegrated. For G-7 countries, there isn’t any cointegration relationship detected among the electricity consumption, real GDP and employment series at the zero, semi annual and annual frequencies excepted for Italy. Key words: Electricity Consumption, Economic Growth, Employment, Seasonal Panel Unit Roots, Seasonal Cointegration, G-7 Countries

Energy and Agriculture in Australia and New Zealand: Politics, Prices and Economic Outcomes

Energy is a significant agricultural input in both Australia and New Zealand. Likewise agriculture in NZ Australia has the potential to produce significant energy sources - the extent to which depends on the price of competing energy sources - particularly oil. Higher energy prices, resulting in changes in land use in North America also have the potential to significantly impact the demand for, and prices received, for Australian and New Zealand agricultural commodities. This paper analyses recent statistics on agricultural energy consumption in both Australia and New Zealand and considers the relationship between energy prices and aggregate economic activity and economic activity in the farm and farm processing sector. It explores the impact of alternative energy price scenarios on Australian and NZ agriculture. It is informed by both CGE analysis of the NZ economy and results of international studies. The evolution of outcomes is sensitive to both global energy prices and the policy responses of the Australian and New Zealand Governments.Farm Management, Resource /Energy Economics and Policy,