Causality between Energy Consumption and Economic Development: Empirical Evidence from Morocco

Harkat, Tahar (2020): Causality between Energy Consumption and Economic Development: Empirical Evidence from Morocco.

Abstract

A handful number of contributions have been trying to find a proper modeling strategy that captures the true dynamic relationship between energy consumption and economic development in different economies, but none of them targeted Morocco. The relationship between these latter variables have been the point of interest of many economists, as they provide solid insights and guidance to policy makers related to monitoring the use of energy as well as the preparation of new energy infrastructures to meet the existing demand for the different existing consumers. For this, the following contribution determines this relationship using Granger causality test, and empirical findings shows that Morocco supports the conservation hypothesis, meaning that the only causal link is unidirectional and goes from GDP to energy consumption.

• Item Type: MPRA Paper
• Language: English
• Keywords: Energy Consumption, GDP, Economic development, Granger causality, Morocco
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P28 - Natural Resources ; Energy ; Environment; P - Economic Systems > P4 - Other Economic Systems > P48 - Political Economy ; Legal Institutions ; Property Rights ; Natural Resources ; Energy ; Environment ; Regional Studies; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

References

Abbasian, E., Nazari, M., Nasrindoost, M. (2010). Energy consumption and economic growth in the Iranian economy: Testing the causality relationship. Middle-East Journal of Scientific Research 5, 374-381.

Adom, P.K. (2011). Electricity consumption-economic growth nexus: The Ghanaian case. International Journal of Energy Economics and Policy 1, 18-31.

Arfaoui, L. (2016). Modelling Economic Growth and Energy Consumption in MENA Countries: Cointergration and Causality Analysis. International Journal of Academic Research in Business and Social Sciences, 6(4). doi: 10.6007/ijarbss/v6-i4/2106

Azlina, A.A., Mustapha, N.H.N., (2012). Energy, Economic Growth and Pollutant Emissions.

Bélaïd, F., & Abderrahmani, F. (2013). Electricity consumption and economic growth in Algeria: A multivariate causality analysis in the presence of structural change. Energy Policy, 55, 286-295.

Carfora, A., Pansini, R. V., & Scandurra, G. (2019). The causal relationship between energy consumption, energy prices and economic growth in Asian developing countries: A replication. Energy Strategy Reviews, 23, 81-85.

Chandran, V.G.R., Sharma, S., Madhavan, K. (2010). Electricity consumption-growth nexus: The case of Malaysia. Energy Policy 38, 606–612.

Chang, C.C. (2010). A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China. Applied Energy 87, 3533–3537.

Chaudhry, I. S., Safdar, N., & Farooq, F. (2012). Energy consumption and economic growth: Empirical evidence from Pakistan. Pakistan Journal of Social Sciences, 32(2), 371-382.

Damette, O., Seghir, M. (2013). Energy as a driver of growth in oil exporting countries? Energy Economics 37, 193-199.

Driouchi, A., Harkat, T. (2017). Granger Causality and the Factors underlying the Role of Younger Generations in Economic, Social and Political Changes in Arab Countries. MPRA 77218.

Haghnejad, A., Dehnavi, J. (2012). Energy consumption, economic growth, and pollution in selected OPEC countries: Testing the environmental Kuznets curve hypothesis. Journal of Academic Research in Economics 2, 149-166.

Hu, X., Lin, X. (2013). Study of the relationship between electricity consumption and GDP growth in Hainan. International Tourism Island of China.WorldEcon.4 (1), 109–115.

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 Economics, 67, 41-54.

Georgantopoulos, A. (2012), Electricity consumption and economic growth: analysis and forecasts using VAR/VEC approach for greece with capital formation. International Journal of Energy Economics and Policy, 2(4), 263-278.

Jakovac, P. (2018). Causality between energy consumption and economic growth: Literature review. In INTCESS 2018-5th International Conference on Education and Social Sciences.

Javid A. Y., Javid, M., andZ.A. Awan, (2013). Electricity consumption and economic growth: evidence from Pakistan. Economics and Business Letters 2(1), 21-32.

Kim, J. H., & Choi, I. (2017). Unit roots in economic and financial time series: a re-evaluation at the decision-based significance levels. Econometrics, 5(3), 41.

Kouakou, A. K. (2011). Economic Growth and Electricity Consumption in Cote d’Ivoire: Evidence from Time Series Analysis. Energy Policy. 3638-3644.

Kwakwa, P.A. (2012), Disaggregated energy consumption and economic growth in Ghana. International Journal of Energy Economics and Policy, 2(1), 34-40.

Lee, C.C., Chang, C.P. (2008), Energy consumption and economic growth in Asian economies: a more comprehensive analysis using panel data. Resource and Energy Economics, 30(1), 50-65.

Masih, A.M.M., Masih, R. (1997), On the Temporal causal relationship between energy consumption, real income, and prices: some evidence from Asian-energy dependent NICs based on a multivariate cointegration/vector error-correction approach. Journal of Policy Modeling, 19(4), 417-440.

Mazbahul, G.A., Nazrul, A.K.M. (2011). Electricity consumption and economic growth nexus in Bangladesh: Revisited evidences. Energy Policy 39, 6145–6150.

Odhiambo, N. (2010). Energy consumption, prices and economic growth in three SSA countries: A comparative study. Energy Policy 38, 2463–2469.

Ouedraogo, N.S. (2013). Energy consumption and economic growth: Evidence from the economic community of West African States (ECOWAS). Energy Economics 36, 637-647.

Ozturk, I. (2010). A literature survey on energy–growth nexus. Energy Policy 38, 340-349.

Ozturk, I. andA. Acaravci, 2010. “The causal relationship between energy consumption and GDP in Albania, Bulgaria, Hungary and Romania”, Evidence from ARDL bound testing approach. Applied Energy, 87: 1938-1943.

Rezitis, A. N., & Ahammad, S. M. (2015). The relationship between energy consumption and economic growth in south and Southeast Asian countries: A panel VAR approach and causality analysis. International Journal of Energy Economics and Policy, 5(3), 704-715.

Shahbaz, M., Lean, H.H. (2012). The dynamics of electricity consumption and economic growth: A re visit study of their causality in Pakistan. Energy 39, 146–153

Shahiduzzaman, M., Alam, K. (2012). Cointegration and causal relationships between energy consumption and output: Assessing the evidence from Australia. Energy Economics 34, 2182- 2188.

Solarin, S.A. (2011). Electricity Consumption and Economic Growth: Trivariate investigation in Botswana with Capital Formation. International Journal of Energy Economics and Policy. 1(2), 2-46.

Soytas, U., Sari, R. (2003), Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Economics, 25, 33-37.