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

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  • Farhani, Sahbi
  • Shahbaz, Muhammad
  • Arouri, Mohammed

Abstract

This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in case of Tunisia over the period of 1980-2010. We used Auto-Regressive Distributed Lag (ARDL) bounds testing approach to test the existence of long run relationship between the variables. The Vector Error Correction Method (VECM) Granger approach is applied to test the direction of causal relation between the series. Our findings indicate the existence of long-run 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 policy makers to formulate a comprehensive energy policy to sustain economic growth for long run.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 49260.

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Date of creation: 18 Aug 2013
Date of revision: 21 Aug 2013
Handle: RePEc:pra:mprapa:49260

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

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Cited by:
  1. Shahbaz, Muhammad & Nasreen, Samia & Ling, Chong Hui & Sbia, Rashid, 2014. "Causality between trade openness and energy consumption: What causes what in high, middle and low income countries," Energy Policy, Elsevier, vol. 70(C), pages 126-143.
  2. 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.
  3. 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.
  4. 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.
  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. 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.

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