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Multivariate granger causality between electricity consumption, exports and GDP : Evidence from a panel of Middle Eastern countries
journal contributionposted on 2009-01-01, 00:00 authored by Paresh Narayan, R Smyth
This paper examines the causal relationship between electricity consumption, exports and gross domestic product (GDP) for a panel of Middle Eastern countries. We find that for the panel as a whole there are statistically significant feedback effects between these variables. A 1 per cent increase in electricity consumption increases GDP by 0.04 per cent, a 1 per cent increase in exports increases GDP by 0.17 per cent and a 1 per cent increase in GDP generates a 0.95 per cent increase in electricity consumption. The policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth. Further policy implications are that for the panel as a whole promoting exports, particularly non-oil exports, is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies.
Pagination229 - 236
LocationAmsterdam, The Netherlands
Publication classificationC1 Refereed article in a scholarly journal
Copyright notice2008, Elsevier Ltd.
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electricityMiddle EastcausalitySocial SciencesScience & TechnologyTechnologyLife Sciences & BiomedicineEconomicsEnergy & FuelsEnvironmental SciencesEnvironmental StudiesBusiness & EconomicsEnvironmental Sciences & EcologyENERGY-CONSUMPTIONECONOMIC-GROWTHERROR-CORRECTIONREAL INCOMEUNIT-ROOTCOINTEGRATIONPERMANENTTEMPORARYSHOCKSEMPLOYMENT