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Does Electricity Supply Matter for Economic Growth in Russia: A Vector Error Correction Approach

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  • Alexander Bass

    (Department of Financial Markets and Banks, Financial University under the Government of the Russian Federation, Moscow, Russia.)

Abstract

In this article we investigate the relationship between electricity consumption and economic growth in Russia. According to the production function of economic growth models, energy supply must be a catalyst of great importance for the economic growth. We investigate this nexus on the example of the Russian data for the period 1990-2017. Using vector error correction approach and granger causality test we aim to detect presence or absence of cointegration in the long run between electricity supply, economic growth and employment rate. Results show that the sampled variables are cointegrated and there exists a long-run relationship between them. Short-run effects analysis show that electricity supply does not significantly affects economic growth. Granger causality test shows that there exist a unidirectional causality running from electricity supply to economic growth and from economic growth to employment. The results show that electricity supply is essential for boosting economic growth in Russia in the long run.

Suggested Citation

  • Alexander Bass, 2018. "Does Electricity Supply Matter for Economic Growth in Russia: A Vector Error Correction Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 313-318.
    • Handle: RePEc:eco:journ2:2018-05-40
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    References listed on IDEAS

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    3. Ali Sabyrzhan & Gulnara Balgimbekova & Viktor Shestak, 2021. "RETRACTED ARTICLE: Economic and legal regulation of the use and development of renewable energy sources," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 21(4), pages 595-610, December.
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    5. Yasin Ahmed Sulub & Zarinah Hamid & Mior Nasir Mior Nazri, 2020. "Renewable Energy Supply and Economic Growth in Malaysia: An Application of Bounds Testing and Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 255-264.
    6. Anam Azam & Muhammad Rafiq & Muhammad Shafique & Muhammad Ateeq & Jiahai Yuan, 2020. "Causality Relationship Between Electricity Supply and Economic Growth: Evidence from Pakistan," Energies, MDPI, vol. 13(4), pages 1-20, February.
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    More about this item

    Keywords

    economic growth; employment; electricity supply; cointegration; Granger causality;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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