A multivariate analysis of the causal flow between renewable energy consumption and GDP in Tunisia
AbstractThis paper examines the causality linkages between economic growth, renewable energy consumption, CO2 emissions and domestic investment in Tunisia between 1971 and 2010. Using the ARDL bounds testing approach to cointegration, long-run relationships between the variables are identified. The Granger causality analysis, on the other hand, indicates that there is bi-directional causality between renewable energy consumption and economic growth, which supports the feedback hypothesis in Tunisia. In addition, the quantity of CO2 emissions collapses as a reaction to an increase in renewable energy consumption. These findings remain robust even when controlling for the presence of structural break. We conclude that more efforts should be undertaken to further develop a suitable infrastructure to the renewable energy sector, given its enhancing-effects on economic growth and reducing-effects on CO2 emissions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52572.
Date of creation: 29 Dec 2013
Date of revision:
ARDL; Economic growth; Granger causality; Renewable energy consumption; Structural break; Tunisia.;
Find related papers by JEL classification:
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-01-10 (All new papers)
- NEP-ARA-2014-01-10 (MENA - Middle East & North Africa)
- NEP-ENE-2014-01-10 (Energy Economics)
- NEP-ENV-2014-01-10 (Environmental Economics)
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