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The Dynamics of Electricity Consumption, Energy Use and GDP in Bangladesh

Author

Listed:
  • Abu Hasan
  • Anita Zaman
  • Zohirul Islam Sikder
  • Abdul Wadud

Abstract

The aim of this paper is to investigate the relationship between electricity consumption, energy use and GDP in Bangladesh, using annual data covering the period from 1980 to 2014. The bounds testing (ARDL) approach reveal that electricity consumptions have significant and positive long run impact on GDP and vice versa. The results of the estimated ARDL-ECM models indicate that long-run causality is directing from electricity consumptions and energy use to GDP, and GDP and energy use to electricity consumptions. Thus, in the long run, we find evidence of the feedback hypothesis suggesting the interdependent relationship between electricity consumption and economic growth in which causation runs in both directions and serve as complements. Finally, this study also explores that the relationship among the variables is insignificant in the short-run. Thus, the empirical results of this study might provide a better enthusiastic to the policymakers of Bangladesh to execute the Power System Master Plan (PSMP) 2016 to become a high-income country by 2041.

Suggested Citation

  • Abu Hasan & Anita Zaman & Zohirul Islam Sikder & Abdul Wadud, 0. "The Dynamics of Electricity Consumption, Energy Use and GDP in Bangladesh," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 20(65), pages 35-49, September.
    • Handle: RePEc:rej:journl:v:20:y::i:65:p:35-49
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Electricity Consumption; GDP; Unit Root; Bounds Test;
    All these keywords.

    JEL classification:

    • 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
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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