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Economic Growth and Electricity Consumption in Africa and Asia: MS-VAR and MS-GRANGER Causality Analysis

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  • Bildirici, Melike

Abstract

Knowledge of the direction of the causality between electricity consumption and economic growth is of primary importance if appropriate energy policies and energy conservation measures are to be devised.This study estimates the causality relationship between electricity consumption and economic growth by Markov Switching Vector Auto Regression (VAR) and Markov Switching Granger Causality methods for some emerging countries; Brunei, Cameron, Côte d'Ivoire, Nigeria, South Africa, Togo and Zimbabwe. The results from MS-VAR models show that in regime one, two and three, Electricity Consumption (EC) is the Granger cause of the Gross Domestic Product (GDP) and GDP is the Granger cause of the EC. In sum, we find some evidence of bidirectional GC between the EC and the GDP.

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  • Bildirici, Melike, 2012. "Economic Growth and Electricity Consumption in Africa and Asia: MS-VAR and MS-GRANGER Causality Analysis," MPRA Paper 40515, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:40515
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Which comes first: electricity or economic growth?
      by Economic Logician in Economic Logic on 2012-09-04 20:24:00

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    2. Manzoor Ahmad & Shoukat Iqbal Khattak, 2020. "Is Aggregate Domestic Consumption Spending (ADCS) Per Capita Determining CO2 Emissions in South Africa? A New Perspective," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 529-552, March.
    3. Bah, Muhammad Maladoh & Azam, Muhammad, 2017. "Investigating the relationship between electricity consumption and economic growth: Evidence from South Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 531-537.
    4. Majed S. Almozaini, 2019. "The Causality Relationship between Economic Growth and Energy Consumption in The World s top Energy Consumers," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 40-53.
    5. Eltejaei , Ebrahim & Montazeri Shoorekchali , Jalal, 2021. "Investigating the Relationship between Money Growth and Inflation in Turkey: A Nonlinear Causality Approach," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 16(3), pages 305-322, September.
    6. Apergis, Nicholas & Polemis, Michael, 2018. "Electricity supply shocks and economic growth across the US states: evidence from a time-varying Bayesian panel VAR model, aggregate and disaggregate energy sources," MPRA Paper 84954, University Library of Munich, Germany.
    7. Bildirici, Melike E. & Gökmenoğlu, Seyit M., 2017. "Environmental pollution, hydropower energy consumption and economic growth: Evidence from G7 countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 68-85.
    8. Dogan, Eyup, 2015. "The relationship between economic growth and electricity consumption from renewable and non-renewable sources: A study of Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 534-546.
    9. Ioana Anda Milin & Mariana Claudia Mungiu Pupazan & Abdul Rehman & Irina Elena Chirtoc & Nicolae Ecobici, 2022. "Examining the Relationship between Rural and Urban Populations’ Access to Electricity and Economic Growth: A New Evidence," Sustainability, MDPI, vol. 14(13), pages 1-16, July.
    10. Menegaki, Angeliki N. & Tugcu, Can Tansel, 2017. "Energy consumption and Sustainable Economic Welfare in G7 countries; A comparison with the conventional nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 892-901.
    11. Özgür ERSİN & Melike BİLDİRİCİ, 2017. "A Nonlinear Analysis of Monetary Policy with Dominance Indices in Turkey: MS-VAR Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 22-46, December.
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    13. Bildirici, Melike E. & Badur, Mesut M., 2019. "The effects of oil and gasoline prices on confidence and stock return of the energy companies for Turkey and the US," Energy, Elsevier, vol. 173(C), pages 1234-1241.

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    More about this item

    Keywords

    Economic Growth; Electricity Consumption; MS-VAR; MS-Granger Causality;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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