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Multivariate granger causality between electricity consumption, exports and GDP : Evidence from a panel of Middle Eastern countries

journal contribution
posted 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.

History

Journal

Energy policy

Volume

37

Issue

1

Pagination

229 - 236

Publisher

Elsevier Ltd.

Location

Amsterdam, The Netherlands

ISSN

0301-4215

eISSN

1873-6777

Language

eng

Publication classification

C1 Refereed article in a scholarly journal

Copyright notice

2008, Elsevier Ltd.