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Causality between electricity consumption and economic growth: empirical evidence from India

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  • Lopamudra Mishra

Abstract

The present paper tries to examine the Granger causality between per capita electricity consumption and per capita gross domestic product (GDP) at 2004-2005 prices for India using annual data covering the period 1970-1971 to 2015-2016. It applies error-correction model to examine the causal relationship between these two variables. The estimated results indicate that the per capita real GDP and per capita electricity consumption are co-integrated and there is unidirectional Granger causality running from real GDP to electricity consumption but not vice-versa. In the short run, the results of the causality test show that bidirectional causality flow from economic growth to electricity consumption in India. Thus the Government of India has to face the numerous energy challenges in the future.

Suggested Citation

  • Lopamudra Mishra, 2018. "Causality between electricity consumption and economic growth: empirical evidence from India," International Journal of Indian Culture and Business Management, Inderscience Enterprises Ltd, vol. 17(4), pages 417-427.
    • Handle: RePEc:ids:ijicbm:v:17:y:2018:i:4:p:417-427
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    Cited by:

    1. Bilgehan TEKIN & Erol YENER, 2019. "The causality between economic growth and stock market in developing and developed countries: Toda-Yamamoto approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(619), S), pages 79-90, Summer.
    2. Cemil Kuzey & Ali Uyar & Amal Hamrouni & Merve Kilic & Rim Boussaada, 2021. "The link between institutional quality, ethical behaviors of firms, and market regulations on stock market developments," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 998-1021, June.

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