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Asymmetries, Structural Breaks, and Nonlinear Persistence: Evidence and Implications for Uncovering the Energy-Growth Nexus in Selected African Countries

Njindan Iyke, Bernard (2015): Asymmetries, Structural Breaks, and Nonlinear Persistence: Evidence and Implications for Uncovering the Energy-Growth Nexus in Selected African Countries.

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Abstract

The paper utilizes the nonparametric Triple test, the Bai-Perron test, and the KSS test to examine whether the paths of energy consumption and economic growth for 19 African countries are characterized by asymmetries, structural breaks, and nonlinear persistence over the period 1971-2011. We find evidence of deepness and steepness asymmetry, structural breaks, and nonlinear persistence in energy consumption and economic growth for these countries. The implications of these findings are that: (i) the findings of studies which examine the energy-growth nexus for these countries in linear settings may be doubtful; (ii) forecasts of energy consumption and economic growth which rely on linear models may contain sizeable forecasting errors. We recommend that future research on the energy-growth nexus should attempt to account for these nonlinearities in order to report more efficient estimates.

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