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Modeling Electricity Consumption for Growth in an Open Economy

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  • Pavlos Stamatiou

    (Department of Accounting and Finance, University of Macedonia, Thessaloniki, Greece)

Abstract

The purpose of this paper is to analyze the long run equilibrium relationship of electricity consumption in Italy from a unique perspective, taking tourism expansion as a proxy for exogenous growth. The sample used is annual data covering the period 1990-2018. The Autoregressive Distributed Lag (ARDL) bounds testing approach and the causality method of Toda and Yamamoto (1995) are applied, as the most appropriate for the integration of the variables and the sample size. The ARDL results, as well as additional cross checking test, reveal a long run relation between electricity consumption, foreign tourist arrivals and economic growth in the country. Foreign tourist arrivals and economic growth have significant impact on electricity consumption, both in the short and in the long run. ?he causality results support unidirectional causalities running from foreign tourist arrivals and economic growth to electricity consumption. In addition, foreign tourist arrivals influence electricity consumption both directly and indirectly through economic growth. Policy implications are further discussed.

Suggested Citation

  • Pavlos Stamatiou, 2022. "Modeling Electricity Consumption for Growth in an Open Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 154-163, March.
    • Handle: RePEc:eco:journ2:2022-02-17
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    Cited by:

    1. Pavlos Stamatiou, 2023. "Μοdeling Environmental Degradation: The Effects of Electricity Consumption, Economic Growth and Globalization," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 62-72, September.
    2. Ahmed Oluwatobi Adekunle & Biliqees Ayoola Abdulmumin & Joseph Olorunfemi Akande & Kehinde Gabriel Ajose, 2022. "Modelling Aggregate Energy Consumption for Growth in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 389-395, November.

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    More about this item

    Keywords

    Foreign Tourist Arrivals; Electricity Consumption; Economic Growth; ARDL Cointegration Test; Toda-Yamamoto Causality Test;
    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
    • 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
    • Z32 - Other Special Topics - - Tourism Economics - - - Tourism and Development
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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