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Short-run and long-run effect of oil consumption on economic growth: ECM model

Author

Listed:
  • Sofyan Syahnur
  • Endra
  • Said Muhammad

    (Faculty of Economics, Universitas Syiah Kuala, Banda Aceh, Indonesia.
    Faculty of Economics, Universitas Syiah Kuala, Banda Aceh, Indonesia.
    Faculty of Economics, Universitas Syiah Kuala, Banda Aceh, Indonesia.)

Abstract

The aim of this study is to investigate the effect of oil consumption on economic growth of Aceh in the long-run and short-run by using Error Correction Model (ECM) model during the period before the world commodity prices fall of 19852008. Four types of oil consumption will be focused on Avtur, Gasoline, Kerosene and Diesel. The data is collected from Central Bureau of Statistics of Aceh (BPS Aceh). The result of this study shows a merely positive effect of oil consumption type diesel to economic growth in Aceh both in the short run and the long run.

Suggested Citation

  • Sofyan Syahnur & Endra & Said Muhammad, 2014. "Short-run and long-run effect of oil consumption on economic growth: ECM model," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 6(1), pages 38-49, April.
    • Handle: RePEc:uii:journl:v:6:y:2014:i:1:p:38-49
    DOI: http://dx.doi.org/10.20885/ejem.vol6.iss1.art4
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    References listed on IDEAS

    as
    1. Ghali, Khalifa H. & El-Sakka, M. I. T., 2004. "Energy use and output growth in Canada: a multivariate cointegration analysis," Energy Economics, Elsevier, vol. 26(2), pages 225-238, March.
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    3. Fatai, K & Oxley, Les & Scrimgeour, F.G, 2004. "Modelling the causal relationship between energy consumption and GDP in New Zealand, Australia, India, Indonesia, The Philippines and Thailand," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 64(3), pages 431-445.
    4. Stern, David I., 2000. "A multivariate cointegration analysis of the role of energy in the US macroeconomy," Energy Economics, Elsevier, vol. 22(2), pages 267-283, April.
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    More about this item

    Keywords

    Oil Consumption; Economic Growth; price; ECM;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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