Bildirici, Melike (2012): Economic growth and electricity consumption in Africa and ASIA: MS-VAR and MS-GRANGER causality analysis.
This is the latest version of this item.
Download (475kB) | Preview
Knowledge of the direction of the causality between electricity consumption and economic growth is of primary importance if appropriate energy policies and energy conservation measures are to be devised. This study estimates the causality relationship between electricity consumption and economic growth by Markov Switching Vector Auto Regression (VAR) and Markov Switching Granger Causality methods for some countries in Africa (7 Countries) and Asia(Brunei); Brunei, Cameron, Côte d'Ivoire, Nigeria, South Africa, Togo and Zimbabwe. The results from MS-VAR models show that in regime one, two and three, Electricity Consumption (EC) is the Granger cause of the Gross Domestic Product (GDP) and GDP is the Granger cause of the EC. In sum, we find some evidence of bidirectional GC between the EC and the GDP.
|Item Type:||MPRA Paper|
|Original Title:||Economic growth and electricity consumption in Africa and ASIA: MS-VAR and MS-GRANGER causality analysis|
|English Title:||Economic Growth and Electricity Consumption in Africa and Asia: MS-VAR and MS-GRANGER Causality Analysis|
|Keywords:||Economic Growth, Electricity Consumption, MS-VAR, MS-Granger Causality|
|Subjects:||C - Mathematical and Quantitative Methods > C0 - General
N - Economic History > N7 - Transport, Trade, Energy, Technology, and Other Services
C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics
|Depositing User:||Melike Bildirici|
|Date Deposited:||09. Oct 2012 08:44|
|Last Modified:||13. Feb 2013 06:05|
Adebola,S.S., 2011. Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with Capital Formation, International Journal of Energy Econ. Pol. 1( 2);32-46
Akarca, A.T., Long, T. V., 1980. On the relationship between energy and GNP: a re-examination, Journal of Energy and Development. 5; 326-331.
Akinlo AE., 2009. Electricity consumption and economic growth in Negeria: Evidence from cointegration and co-feature analysis. Journal of Policy Modelling, 31, 681-693
Amusa, H., Amusa, K., Mabugu, R., 2009. Aggregate demand for electricity in South Africa: An analysis using the bounds testing approach to cointegration. Energy Policy. 37, 4167-4175.
Asafu-Adjaye, J., 2000. The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries, Energy Economics, 22; 615-625
Babatunde M.A. Shuaibu M.İ., 2009. The Demand for residential electricity in Nigeria: A bound testing approach, http://www.africametrics.org/documents/conference09/papers/Babatunde_Shuaibi.pdf
Belloumi, M., 2009. Energy consumption and GDP in Tunisia: cointegration and causality analysis. Energy Policy, 37(7), 2745-2753.
De Vita, G., Endresen, K., Hunt, L.C., 2006. An empirical analysis of energy demand in Namibia. Energy Policy, 34, 3447–3463
Ebohon, O.J., 1996. Energy, economic growth and causality in developing countries: a case study of Tanzania and Nigeria. Energy Policy, 24, 447–453
Elliott G, Rothenberg TJ, Stock JH. Efficient tests for an autoregressive unit root. Econometrica 1996;64:813-36.
Erol,U., Yu, E.S.H.1987. On the relationship between electricity and income for industrialized countries. Journal of Electricity and Employment, 13, 113–122.
Falahi F. 2011. Causal relationship between energy consumption (EC) and GDP: A Markov-switching (MS) causality. Energy. 36(7): 4165–4170.
Fatai, K., Oxley, L., Scrimgeour, F.G., 2004. Modeling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia., The Philippines and Thailand. Math. Comput. Simul. 64, 431–445.
Ghosh, S., 2002. Electricity consumption and economic growth in India. Energy Policy. 30, 125–129
Hamilton, J. D. 1989. “A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle,” Econometrica, 57(2), 357-84,
Hamilton, J. D. 1990. Analysis of Time Series Subject to Changes in Regime,” Journal of Econometrics, 45; 39-70.
Huang B.N., Hwang M.J., Yang, C.W., 2008. Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach. Ecological Economy. 6 7, 4 1 – 5 4
Jaunky, C. Vishal., 2006. Income Elasticities of Electric Power Consumption: Evidence from African Countries. Reg. Sec. Econ. Stud. 7, 25-50.
Jefferis. K., (2008), Summary of Economic Developments. BIFM Economic Review 1st Quarter, 2008
Jumbe, Charles B. L., 2004. Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi. Energy Economics. 26(1), 61-68.
Kebede, E., Kagochi, J., Jolly, C. M., 2010. Energy consumption and economic development in Sub-Sahara Africa. Energy Economics, 32(3), 532–537.
Kouakou A.K., (2011), Economic Growth and Electricity Consumption in Côte d'Ivoire: Evidence from Time Series Analysis. Energy Policy, 39, 3638-3644
Kraft, J., Kraft A., 1978. On the Relationship between Energy and GNP. Journal of Energy and Development, 401-403.
Krolzig H-M. 1997. Markov-Switching Vector Autoregressions: Modelling, Statistical Inference, and Application to Business Cycle Analysis. Lecture Notes in Economics and Mathematical Systems No. 454.
Krolzig H-M. 2000. Predicting Markov-switching vector autoregressive processes. Unpublished manuscript, Nuffield College, University of Oxford
Lee, C.C., 2005. Energy consumption and GDP in developing countries: a cointegrated panel analysis. Energy Economics, 27, 415-427.
Mehrara, M., 2007. Energy consumption and economic growth: The case of oil exporting countries. Energy Policy, 35 (5), 939-2945.
Narayan PK., 2005. The saving and investment nexus for China: evidence for cointegration tests. Applied Economics, 37,1979–1990
Narayan P.K, Smyth R., 2005. Electricity consumption, employment, and real income in Australia: evidence from multivariate Granger causality tests. Energy Policy, 33,1109–16.
Narayan, P.K. Smyth,R., 2005/b. Residential demand for electricity in Australia: an application of the bounds testing approach to cointegration. Energy Policy, 33, 467–474.
Narayan, P.K. and Singh,B., 2007. The electricity consumption and GDP nexus for the Fiji Islands. Energy Economics, 29,1141–1150.
Ng S, Perron P. Lag length selection and the construction of unit root tests with good size and power. Econometrica 2001;69:1519-54.
Nondo C., Kahsai Mulugeta S., Schaeffer Peter V.,2010. Energy Consumption and Economic Growth: Evidence from COMESA Countries. Research Papers 2010-1
Odhiambo, N.M., 2009. Energy consumption and economic growth nexus in Tanzania: An ARDL bounds testing approach. Energy Policy, 37, 617–622.
Odhiambo N. M., 2009. Electricity consumption and economic growth in South Africa: A trivariate causality test. Energy Economics, 31(5), 635–640.
Ouédraogo Idrissa M., 2010. Electricity consumption and economic growth in Burkina Faso: A cointegration analysis. Energy Economics, 32, 524–531
Rasche, R.H., Tatom, J.A., 1977. The effects of the new energy regime on economic capacity, production, and prices. Fed. Reserve Bank of St. Louis, May, 2-12
Rosenberg N., 1998. The role of electricity in industrial development. The Energy Journal, 19 ,7–24.
Squalli J.(2007), Electricity consumption and economic growth: bounds and causality analyses of OPEC countries, Energy Economics,29:1192–205.
Warne A. 2000.Causality and Regime Inference in a Markov Switching VAR, December 5,
Psaradakis, Ravn M. Sola M. 2005. Markov switching causality and the money–output relationship, Journal of Applied Econometrics, 20(5); 665–683.
Wolde-Rufael Y W., 2005. Energy demand and economic growth: The African experience. Journal of Policy Modelling 27, 891–903
Wolde-Rufael Y., 2006. Electricity consumption and economic growth: a time series experience for 17 African countries. Energy Policy, 34,1106–14.
Toman, M., Jemelkova, B., 2003. Energy and Economic Development: An Assessment of the State of Knowledge. Energy Journal, 24, 93-112.
Toman, M., 2003. The Roles of the Environment and Natural Resources in Economic Growth Analysis. Discussion Papers -02-71.
Yu, E. S. H., Choi, J. Y., 1985. The Causal Relationship between Energy and GNP : An International Comparison. Journal of Energy and Development. 10, 249-272.
Ziramba E., 2008. The demand for residential electricity in South Africa. Energy Policy, 36,3460–3466.
Available Versions of this Item
Economic Growth and Electricity Consumption in Africa and Asia: MS-VAR and MS-GRANGER Causality Analysis. (deposited 06. Aug 2012 13:50)
- Economic growth and electricity consumption in Africa and ASIA: MS-VAR and MS-GRANGER causality analysis. (deposited 09. Oct 2012 08:44) [Currently Displayed]