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The Role of Natural Gas Consumption and Trade in Tunisia’s Output

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  • Mohamed Arouri
  • Sahbi Farhani
  • Muhammad Shahbaz
  • Frédéric Teulon

Abstract

This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in the case of Tunisia over the period 1980-2010. We use an Autoregressive Distributed Lag (ARDL) bounds testing approach to test the existence of a longterm relationship between the variables. The Vector Error Correction Method (VECM) Granger approach is applied to test the direction of the causal relation between the series. Our findings indicate the existence of a long-term relationship among the variables. Natural gas consumption, real gross fixed capital formation and trade add in economic growth. Natural gas consumption, real gross fixed capital formation and real trade Granger-cause real GDP. These findings open up new insights for policymakers to formulate a comprehensive energy policy to sustain economic growth in the long term.

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Bibliographic Info

Paper provided by Department of Research, Ipag Business School in its series Working Papers with number 2013-057.

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Length: 23 pages
Date of creation: 06 Jan 2014
Date of revision:
Handle: RePEc:ipg:wpaper:2014-057

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Keywords: Natural gas consumption; Economic growth; ARDL approach;

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Citations

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Cited by:
  1. Paresh Narayan & Russell Smyth, 2014. "Applied Econometrics and a Decade of Energy Economics Research," Development Research Unit Working Paper Series 21-14, Monash University, Department of Economics.
  2. Shahbaz, Muhammad & Farhani, Sahbi & Rahman, Mohammad Mafizur, 2013. "Natural Gas Consumption and Economic Growth Nexus: The Role of Exports, Capital and Labor in France," MPRA Paper 50619, University Library of Munich, Germany, revised 12 Oct 2013.
  3. Shahbaz, Muhammad & Nasreen, Samia & Ling, Chong Hui & Sbia, Rashid, 2013. "Causality between Trade Openness and Energy Consumption: What Causes What in High, Middle and Low Income countries," MPRA Paper 50382, University Library of Munich, Germany, revised 04 Oct 2013.
  4. Farhani, Sahbi & Chaibi, Anissa & Rault, Christophe, 2014. "CO2 emissions, output, energy consumption, and trade in Tunisia," Economic Modelling, Elsevier, vol. 38(C), pages 426-434.
  5. Muhammad Shahbaz & Mohamed Arouri & Frédéric Teulon, 2014. "Short- and Long-Run Relationships between Natural Gas Consumption and Economic Growth: Evidence from Pakistan," Working Papers 2014-289, Department of Research, Ipag Business School.
  6. Sahbi Farhani & Muhammad Shahbaz & Mohammad Mafizur Rahman, 2014. "Natural gas consumption and economic growth in France: Evidence for the role of exports, capital and labor," Working Papers 2014-226, Department of Research, Ipag Business School.

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