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Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania

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  • Mutascu, Mihai
  • Shahbaz, Muhammad
  • Tiwari, Aviral Kumar

Abstract

The paper empirically analyzes, in the Romania’s case, the cointegration and causality between electricity consumption, capital and economic growth. The data set is covering the period 1980 - 2008. The results show the existence of bidirectional causality between electricity consumption and economic growth and between economic growth and capital use. In the same time, a unidirectional causal relation is also found from capital use to electricity consumption. The main finding suggests that electricity conservation policies may retard economic growth by reduction in electricity consumption. Moreover, in the opposite direction, from economic growth to electricity consumption, the fluctuations in economic growth may reduce demand for electricity.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29233.

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Date of creation: 01 Feb 2011
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Handle: RePEc:pra:mprapa:29233

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Keywords: Electricity Consumption; Growth; Cointegration;

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Cited by:
  1. Saleheen, Khan & Farooq Ahmed, Jam & Muhammad, Shahbaz, 2012. "Electricity Consumption and Economic Growth in Kazakhstan: Fresh Evidence from a Multivariate Framework Analysis," MPRA Paper 43460, University Library of Munich, Germany, revised 20 Dec 2012.
  2. Wendy N. Cowan & Tsangyao Chang & Roula Inglesi-Lotz & Rangan Gupta, 2013. "The nexus of electricity consumption, economic growth and CO2 emissions in the BRICS countries," Working Papers 201340, University of Pretoria, Department of Economics.
  3. Satti, Saqlain Latif & Hassan, Muhammad shahid & Mahmood, Haider & Shahbaz, Muhammad, 2013. "Coal Consumption: An Alternate Energy Resource to Fuel Economic Growth in Pakistan," MPRA Paper 50147, University Library of Munich, Germany, revised 17 Sep 2013.
  4. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: Cointegration and causality analysis," Energy Policy, Elsevier, Elsevier, vol. 60(C), pages 876-884.
  5. Nicholas Apergisu & Dan Danuletiu, 2012. "Energy Consumption and Growth in Romania: Evidence from a Panel Error Correction Model," International Journal of Energy Economics and Policy, Econjournals, Econjournals, vol. 2(4), pages 348-356.

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