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The relationship between energy consumption and economic growth: evidence from Thailand based on NARDL and causality approaches

Noh, Nadia Mohd and Masih, Mansur (2017): The relationship between energy consumption and economic growth: evidence from Thailand based on NARDL and causality approaches.

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Abstract

Energy plays a crucial role in the economic development of most economies. The causality nexus between energy consumption and economic growth is important in enacting energy consumption policy and environmental policy. This paper tries to investigate the relationship between energy consumption and economic growth for Thailand over the period from 1976 to 2014 applying NARDL approach. The main finding from the NARDL evidence cointegration among economic growth, energy consumption, capital formation and trade openness and found asymmetry is significant for both the long run and short run for economic growth, which implies that taking nonlinearity and asymmetry into account is important when studying the relationship between economic growth and energy consumption. This paper also found that most of the independent variables are found to be significant in the long run compared to the short run. In addition, this paper also discerned Granger-causal chain between the variables through the application of VECM, VDC and IRF analyses.

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