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Energy Consumption-Economic Growth Nexus: Does the Level of Aggregation Matter?

Author

Listed:
  • Mehdi Abid

    (University of Sousse, Tunisia)

  • Maamar Sebri

    (University of Sousse, Tunisia)

Abstract

This study investigates the causal relationship between energy consumption and economic performance for the total economy as well as for industry, transport, and residential sectors for Tunisia during the period 1980-2007. The application of Vector error correction model (VECM) for non-stationary and cointegrated series suggests that causality directions at aggregated and disaggregated levels are mixed. However, the findings have important policy implications. While at the level of the total economy, energy plays an important role in development of Tunisian economy, it seems not to have an impact on economic performance at sectoral level. We conclude that results appear to be dependent on the level of aggregation and therefore policy advices should be given with caution.

Suggested Citation

  • Mehdi Abid & Maamar Sebri, 2012. "Energy Consumption-Economic Growth Nexus: Does the Level of Aggregation Matter?," International Journal of Energy Economics and Policy, Econjournals, vol. 2(2), pages 55-62.
    • Handle: RePEc:eco:journ2:2012-02-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Energy sector; Economic growth; Granger causality; Vector Error Correction Models; Tunisia.;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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