Munich Personal RePEc Archive

Electricity consumption and GDP in an electricity community: Evidence from bound testing cointegration and Granger-causality tests

Alinsato, Alastaire Sèna (2009): Electricity consumption and GDP in an electricity community: Evidence from bound testing cointegration and Granger-causality tests.

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Abstract

This study probes nexus between electricity consumption and GDP for the electricity community of Togo and Benin using ARDL bounds testing approach of cointegration. Long-run equilibrium has been established among these variables for Benin. The study further establishes long- and short-run Granger causality running from GDP to electricity consumption for Benin and short-run Granger causality running from GDP to electricity consumption for Togo. The results of the cointegration test and the causality reflect better the Benin and Togo economies that are less dependent on electricity. The absence of causality running from electricity consumption to GDP implies that electricity demand side management measures can be adopted to reduce the wastage of electricity, which would not affect future economic growth in the community.

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