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A multivariate analysis of the causal flow between renewable energy consumption and GDP in Tunisia

Author

Listed:
  • Ousama Ben-Salha

    (National Engineering School of Gabes and International Finance Group-Tunisia, Tunisia)

  • Maamar Sebri

    (Faculty of Economics and Management of Sousse and LaREMFiQ, IHEC, University of Sousse, Tunisia)

Abstract

This 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. On the other hand, the Granger causality analysis indicates that there is bi-directional causality between renewable energy consumption and economic growth, which supports the validity of the feedback hypothesis. 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.

Suggested Citation

  • Ousama Ben-Salha & Maamar Sebri, 2014. "A multivariate analysis of the causal flow between renewable energy consumption and GDP in Tunisia," Economics Bulletin, AccessEcon, vol. 34(4), pages 2396-2410.
    • Handle: RePEc:ebl:ecbull:eb-14-00643
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    Cited by:

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    4. Ghazouani, tarek, 2018. "Reexamining the Foreign direct investment, Renewable energy consumption and Economic growth nexus: Evidence from a new Bootstrap ARDL test for Cointegration," MPRA Paper 103348, University Library of Munich, Germany, revised 11 Sep 2020.
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    7. Giulia Caruso & Emiliano Colantonio & Stefano Antonio Gattone, 2020. "Relationships between Renewable Energy Consumption, Social Factors, and Health: A Panel Vector Auto Regression Analysis of a Cluster of 12 EU Countries," Sustainability, MDPI, vol. 12(7), pages 1-16, April.

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    More about this item

    Keywords

    Renewable energy consumption; GDP; ARDL; Granger causality; Structural break; Tunisia.;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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