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Multivariate granger causality between electricity consumption, exports and GDP: Evidence from a panel of Middle Eastern countries

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  • Narayan, Paresh Kumar
  • Smyth, Russell

Abstract

This paper examines the causal relationship between electricity consumption, exports and gross domestic product (GDP) for a panel of Middle Eastern countries. We find that for the panel as a whole there are statistically significant feedback effects between these variables. A 1 per cent increase in electricity consumption increases GDP by 0.04 per cent, a 1 per cent increase in exports increases GDP by 0.17 per cent and a 1 per cent increase in GDP generates a 0.95 per cent increase in electricity consumption. The policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth. Further policy implications are that for the panel as a whole promoting exports, particularly non-oil exports, is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 37 (2009)
Issue (Month): 1 (January)
Pages: 229-236

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Handle: RePEc:eee:enepol:v:37:y:2009:i:1:p:229-236

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Web page: http://www.elsevier.com/locate/enpol

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Keywords: Electricity Middle East Causality;

References

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