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Electricity Consumption and Economic Growth in Portugal: Evidence from a Multivariate Framework Analysis

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  • Chor Foon Tang and Eu Chye Tan

Abstract

The purpose of this study is to re-visit the relationship between electricity consumption and economic growth in Portugal over the sample period of 1974 to 2008 in a multivariate framework. The results of this study indicate that the variables are cointegrated and the causal relationship between electricity consumption and economic growth in Portugal is bi-directional. Uni-directional causalities running from energy price and real income to employment are also found. Contrary to earlier studies, our results indicate that Portugal is an energy-dependent economy and energy-conservation policies could be detrimental to its economic growth and development. Therefore, renewable energy sources such as bio-fuel, solar power, hydro power, wind power, and wave power should be aggressively explored to ensure sufficient supply of energy to support the growth of the Portuguese economy in an environment-friendly manner.

Suggested Citation

  • Chor Foon Tang and Eu Chye Tan, 2012. "Electricity Consumption and Economic Growth in Portugal: Evidence from a Multivariate Framework Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
  • Handle: RePEc:aen:journl:ej33-4-02
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    References listed on IDEAS

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    Cited by:

    1. Fallahi, Firouz & Karimi, Mohammad & Voia, Marcel-Cristian, 2016. "Persistence in world energy consumption: Evidence from subsampling confidence intervals," Energy Economics, Elsevier, vol. 57(C), pages 175-183.
    2. repec:gam:jeners:v:8:y:2015:i:12:p:14346-14360:d:60861 is not listed on IDEAS
    3. Bruns, Stephan B. & Gross, Christian, 2013. "What if energy time series are not independent? Implications for energy-GDP causality analysis," Energy Economics, Elsevier, vol. 40(C), pages 753-759.
    4. Apergis, Nicholas & Tang, Chor Foon, 2013. "Is the energy-led growth hypothesis valid? New evidence from a sample of 85 countries," Energy Economics, Elsevier, vol. 38(C), pages 24-31.
    5. Yeboah Asuamah, Samuel, 2016. "Modelling financial development and electricity consumption nexus for Ghana," MPRA Paper 70097, University Library of Munich, Germany.
    6. Polemis, Michael L. & Dagoumas, Athanasios S., 2013. "The electricity consumption and economic growth nexus: Evidence from Greece," Energy Policy, Elsevier, vol. 62(C), pages 798-808.
    7. Tang, Chor Foon & Shahbaz, Muhammad, 2013. "Sectoral analysis of the causal relationship between electricity consumption and real output in Pakistan," Energy Policy, Elsevier, vol. 60(C), pages 885-891.
    8. Tang, Chor Foon & Abosedra, Salah, 2014. "The impacts of tourism, energy consumption and political instability on economic growth in the MENA countries," Energy Policy, Elsevier, vol. 68(C), pages 458-464.
    9. Khan, Saleheen & Jam, Farooq Ahmed & Shahbaz, Muhammad & Mamun, Md Al, 2018. "Electricity Consumption, Economic Growth and Trade Openness in Kazakhstan: Evidence from Cointegration and Causality," MPRA Paper 87977, University Library of Munich, Germany, revised 14 Jul 2018.
    10. Qunli Wu & Chenyang Peng, 2015. "Wind Power Grid Connected Capacity Prediction Using LSSVM Optimized by the Bat Algorithm," Energies, MDPI, Open Access Journal, vol. 8(12), pages 1-15, December.
    11. 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.
    12. repec:eee:rensus:v:81:y:2018:i:p1:p:1226-1240 is not listed on IDEAS
    13. Tang, Chor Foon & Tan, Bee Wah & Ozturk, Ilhan, 2016. "Energy consumption and economic growth in Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1506-1514.
    14. Firouz Fallahi & Mohammad Karimi & Marcel-Cristian Voia, 2014. "Are Shocks to Energy Consumption Persistent? Evidence from Subsampling Confidence Intervals," Carleton Economic Papers 14-02, Carleton University, Department of Economics.
    15. Polemis, Michael L., 2016. "New evidence on the impact of structural reforms on electricity sector performance," Energy Policy, Elsevier, vol. 92(C), pages 420-431.
    16. Maria Pempetzoglou, 2014. "Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 263-273.

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    • F0 - International Economics - - General

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