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Electricity Consumption and Economic Growth Nexus: A Multivariate Analysis for Turkey

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Author Info

  • Ali Acaravci

    (Mustafa Kemal University, Hatay, Turkey)

  • Ilhan Ozturk

    ()
    (Cag University, Mersin, Turkey)

Abstract

This study examines the short-run and long-run causality issues between electricity consumption and economic growth in Turkey for 1968–2006 period by using Granger causality models augmented with a lagged error-correction term. The bounds F–test for cointegration test yields evidence of a long-run relationship between employment ratio, electricity consumption per capita and real GDP per capita. The overall results from the three error-correction based Granger causality models show that there is an evidence of unidirectional short-run, long-run and strong causalities running from the electricity consumption per capita to real GDP per capita. But, there is no causal evidence from the real GDP per capita to electricity consumption per capita. In other words, “Growth hypothesis” is confirmed in Turkey. This suggests that electricity consumption plays an important role in economic growth.

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Bibliographic Info

Article provided by Academy of Economic Studies - Bucharest, Romania in its journal The AMFITEATRU ECONOMIC journal.

Volume (Year): 14 (2012)
Issue (Month): 31 (February)
Pages: 246-257

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Handle: RePEc:aes:amfeco:v:14:y:2012:i:31:p:246-257

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Related research

Keywords: electricity consumption; economic growth; causality;

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References

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  1. Altinay, Galip & Karagol, Erdal, 2005. "Electricity consumption and economic growth: Evidence from Turkey," Energy Economics, Elsevier, Elsevier, vol. 27(6), pages 849-856, November.
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  3. Odhiambo, Nicholas M., 2009. "Energy consumption and economic growth nexus in Tanzania: An ARDL bounds testing approach," Energy Policy, Elsevier, Elsevier, vol. 37(2), pages 617-622, February.
  4. Halicioglu, Ferda, 2007. "Residential electricity demand dynamics in Turkey," Energy Economics, Elsevier, Elsevier, vol. 29(2), pages 199-210, March.
  5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
  6. Soytas, Ugur & Sari, Ramazan, 2007. "The relationship between energy and production: Evidence from Turkish manufacturing industry," Energy Economics, Elsevier, Elsevier, vol. 29(6), pages 1151-1165, November.
  7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 12(2-3), pages 231-254.
  8. Jumbe, Charles B. L., 2004. "Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi," Energy Economics, Elsevier, Elsevier, vol. 26(1), pages 61-68, January.
  9. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
  10. Payne, James E., 2010. "A survey of the electricity consumption-growth literature," Applied Energy, Elsevier, Elsevier, vol. 87(3), pages 723-731, March.
  11. Narayan, Paresh Kumar & Prasad, Arti, 2008. "Electricity consumption-real GDP causality nexus: Evidence from a bootstrapped causality test for 30 OECD countries," Energy Policy, Elsevier, Elsevier, vol. 36(2), pages 910-918, February.
  12. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, Elsevier, vol. 38(1), pages 340-349, January.
  13. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
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Cited by:
  1. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate Causality between Economic Growth, Urbanisation and Electricity Consumption in Angola: Cointegration and Causality Analysis," MPRA Paper 45580, University Library of Munich, Germany, revised 19 Mar 2013.
  2. Chibueze, E. Nnaji & Jude, O. Chukwu & Nnaji Moses, 2013. "Electricity Supply, Fossil fuel Consumption, Co2 Emissions and Economic Growth: Implications and Policy Options for Sustainable Development in Nigeria," International Journal of Energy Economics and Policy, Econjournals, Econjournals, vol. 3(3), pages 262-271.
  3. Saleheen, Khan & Farooq Ahmed, Jam & Muhammad, Shahbaz, 2012. "Electricity Consumption and Economic Growth in Kazakhstan: Fresh Evidence from a Multivariate Framework Analysis," MPRA Paper 43460, University Library of Munich, Germany, revised 20 Dec 2012.
  4. Mustafa SAATCÝ & Yasemin DUMRUL, 2013. "The Relationship Between Energy Consumption and Economic Growth: Evidence From A Structural Break Analysis For Turkey," International Journal of Energy Economics and Policy, Econjournals, Econjournals, vol. 3(1), pages 20-29.
  5. Maria Pempetzoglou, 2014. "Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey," International Journal of Energy Economics and Policy, Econjournals, Econjournals, vol. 4(2), pages 263-273.
  6. Muhammad, Shahbaz & Ilhan, Ozturk, 2012. "Electricity consumption and economic growth causality revisited: evidence from Turkey," MPRA Paper 37637, University Library of Munich, Germany, revised 20 Mar 2012.

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