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Disaggregated Energy Consumption and Economic Growth in Ghana

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  • Paul Adjei Kwakwa

    (Department of Business Economics, Presbyterian University College, Ghana)

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    Abstract

    This study has examined the causality between disaggregated energy consumption (electricity and fossil consumption) and overall growth, agricultural and manufacturing growth in Ghana’s economy over the period 1971-2007. By employing the Augmented Dickey Fuller test all variables were found to be integrated of the order one and the Johansen test showed the presence of cointegration between the variables. The granger causality test for the study indicated a unidirectional causality from overall growth to electricity and fossil consumption; a unidirectional causality from agriculture to electricity consumption both in the short and long run; and a feedback relationship between manufacturing and electricity consumption. Energy seem not be an essential factor of production in the agricultural sector but important in the manufacturing sector therefore, it is recommended that efforts be geared towards ensuring a high supply of energy to the manufacturing sector in order to keep up its contribution to the economy.

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    Bibliographic Info

    Article provided by Econjournals in its journal International Journal of Energy Economics and Policy.

    Volume (Year): 2 (2012)
    Issue (Month): 1 ()
    Pages: 34-40

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    Handle: RePEc:eco:journ2:2012-01-4

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    Web page: http://www.econjournals.com

    Related research

    Keywords: Energy consumption; Economic growth; Cointegration; Granger causality; Ghana;

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    References

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    1. Morimoto, Risako & Hope, Chris, 2004. "The impact of electricity supply on economic growth in Sri Lanka," Energy Economics, Elsevier, vol. 26(1), pages 77-85, January.
    2. Yang, Hao-Yen, 2000. "A note on the causal relationship between energy and GDP in Taiwan," Energy Economics, Elsevier, vol. 22(3), pages 309-317, June.
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    4. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
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    7. Yuan, Jia-Hai & Kang, Jian-Gang & Zhao, Chang-Hong & Hu, Zhao-Guang, 2008. "Energy consumption and economic growth: Evidence from China at both aggregated and disaggregated levels," Energy Economics, Elsevier, vol. 30(6), pages 3077-3094, November.
    8. Lorde, Troy & Waithe, Kimberly & Francis, Brian, 2010. "The importance of electrical energy for economic growth in Barbados," Energy Economics, Elsevier, vol. 32(6), pages 1411-1420, November.
    9. Soytas, Ugur & Sari, Ramazan, 2007. "The relationship between energy and production: Evidence from Turkish manufacturing industry," Energy Economics, Elsevier, vol. 29(6), pages 1151-1165, November.
    10. Masih, Abul M. M. & Masih, Rumi, 1997. "On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correctio," Journal of Policy Modeling, Elsevier, vol. 19(4), pages 417-440, August.
    11. Philip Kofi Adom, 2011. "Electricity Consumption-Economic Growth Nexus: The Ghanaian Case," International Journal of Energy Economics and Policy, Econjournals, vol. 1(1), pages 18-31, June.
    12. Francis, Brian M. & Moseley, Leo & Iyare, Sunday Osaretin, 2007. "Energy consumption and projected growth in selected Caribbean countries," Energy Economics, Elsevier, vol. 29(6), pages 1224-1232, November.
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    Cited by:
    1. Adom, Philip Kofi & Bekoe, William, 2013. "Modelling electricity demand in Ghana revisited: The role of policy regime changes," Energy Policy, Elsevier, vol. 61(C), pages 42-50.
    2. 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.
    3. Nicholas Apergisu & Dan Danuletiu, 2012. "Energy Consumption and Growth in Romania: Evidence from a Panel Error Correction Model," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 348-356.
    4. Muhammad, Shahbaz, 2011. "Electricity Consumption, Financial Development and Economic Growth Nexus: A Revisit Study of Their Causality in Pakistan," MPRA Paper 35588, University Library of Munich, Germany, revised 27 Dec 2011.

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