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Modelling Asymmetric effects of Electricity Consumption and Economic Growth in Nigeria: Fresh evidence from Asymmetric ARDL and Granger Causality

OSHOTA, Sebil (2019): Modelling Asymmetric effects of Electricity Consumption and Economic Growth in Nigeria: Fresh evidence from Asymmetric ARDL and Granger Causality.

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Abstract

A handful number of studies have sought to find a proper modeling strategy that captures the true dynamic relationship between electricity consumption and economic growth in Nigeria. Most of these studies have assumed a linear relationship in describing the pattern of behaviour in electricity-growth nexus. Departing from previous studies in the literature, this paper assumes both dynamic and asymmetric modelling approach in investigating the relationship between electricity Consumption and economic growth in Nigeria during the period 1971 to 2017, using the Non-Linear Autoregressive Distributed Lag (NARDL). Our findings confirmed the existence of both the long and short run asymmetric relationship between electricity consumption and economic growth. The study further shows that in the long run, decline in electricity (negative changes) has a reducing impact on economic growth. The implication of this is that in order to avoid reduction in economic growth that could be associated with decline in electricity consumption, policy makers should strive to maintain positive economic growth.

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