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The Relationship between Energy Consumption and Output: A Frequency Domain Approach

Author

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  • Wen-Chi Liu

    (2Department of Finance, Da-Yeh University, Changhua, Taiwan.)

Abstract

This paper examines the causal relationship between energy consumption and economic growth in three African countries (i.e., Algeria, Egypt, and South Africa) from 1970 to 2011 using the frequency domain-based Granger causality test proposed by Lemmens et al. (2008). Our empirical results reveal a unidirectional causality, from energy consumption to economic growth, for Algeria, bi-directional causality between energy consumption and economic growth for Egypt, and no causality in any direction between energy consumption and economic growth for South Africa. Our findings provide important implications for energy policies and strategies in the three African countries.

Suggested Citation

  • Wen-Chi Liu, 2013. "The Relationship between Energy Consumption and Output: A Frequency Domain Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 44-55, December.
    • Handle: RePEc:rjr:romjef:v::y:2013:i:4:p:44-55
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    References listed on IDEAS

    as
    1. James E. Payne, 2010. "Survey of the international evidence on the causal relationship between energy consumption and growth," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(1), pages 53-95, January.
    2. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    3. Lemmens, Aurélie & Croux, Christophe & Dekimpe, Marnik G., 2008. "Measuring and testing Granger causality over the spectrum: An application to European production expectation surveys," International Journal of Forecasting, Elsevier, vol. 24(3), pages 414-431.
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    Cited by:

    1. Alexandra-Anca PURCEL, 2020. "Developing States and the Green Challenge. A Dynamic Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 173-193, July.
    2. Alexandra-Anca Purcel, 2020. "Developing states and the green challenge. A dynamic approach," Post-Print hal-03182341, HAL.

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    More about this item

    Keywords

    energy consumption; output; Granger causality; frequency-domain; African countries;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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