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Energy Consumption and Economic Growth in Algeria: Cointegration and Causality Analysis

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  • Souhila EDDRIEF-CHERFI

    (Department of Economics, University of Oran, Algeria)

  • Baghdad KOURBALI

    (Department of Economics, University of Oran, Algeria)

Abstract

This study investigates the energy consumption-growth nexus in Algeria. The causal relationship between the logarithm of per capita energy consumption (LPCEC) and the logarithm of per capita GDP (LPCGDP) during the 1965-2008 period is examined using the threshold cointegration and Granger causality tests. The estimation results indicate that the LPCEC and LPCGDP for Algeria are non cointegrated and that there is a uni-directional causality running from LPCGDP to LPCEC, but not vice versa. The research results strongly support the neoclassical perspective that energy consumption is not a limiting factor to economic growth in Algeria. Accordingly, an important policy implication resulting from this analysis is that government can pursue the conservation energy policies that aim at curtailing energy use for environmental friendly development purposes without creating severe effects on economic growth. The energy should be efficiently allocated into more productive sectors of the economy

Suggested Citation

  • Souhila EDDRIEF-CHERFI & Baghdad KOURBALI, 2012. "Energy Consumption and Economic Growth in Algeria: Cointegration and Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 238-249.
  • Handle: RePEc:eco:journ2:2012-04-4
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    Cited by:

    1. Mustafa SAATCÝ & Yasemin DUMRUL, 2013. "The Relationship Between Energy Consumption and Economic Growth: Evidence From A Structural Break Analysis For Turkey," International Journal of Energy Economics and Policy, Econjournals, pages 20-29.
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    3. Hüseyin Kalyoncu & Faruk Gürsoy & Hasan Göcen, 2013. "Causality Relationship between GDP and Energy Consumption in Georgia, Azerbaijan and Armenia," International Journal of Energy Economics and Policy, Econjournals, pages 111-117.
    4. Mirza, Faisal Mehmood & Kanwal, Afra, 2017. "Energy consumption, carbon emissions and economic growth in Pakistan: Dynamic causality analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1233-1240.
    5. Farzana Sharmin & Mohammed Robayet Khan & Mohammed Robayet Khan, 2016. "A Causal Relationship between Energy Consumption, Energy Prices and Economic Growth in Africa," International Journal of Energy Economics and Policy, Econjournals, pages 477-494.
    6. Hazuki ISHIDA, 2013. "Causal Relationship between Fossil Fuel Consumption and Economic Growth in Japan: A Multivariate Approach," International Journal of Energy Economics and Policy, Econjournals, pages 127-136.
    7. Kyophilavong, Phouphet & Shahbaz, Muhammad & Anwar, Sabeen & Masood, Sameen, 2015. "The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 46(C), pages 265-274.
    8. Peter Baláz & Lukáš Harvánek, 2016. "Competitiveness of the Chinese Economy and its Link to the Global Energy Prices Development," International Journal of Energy Economics and Policy, Econjournals, pages 305-317.
    9. Mehdi Abid & Rafaa Mraihi, 2015. "Disaggregate Energy Consumption Versus Economic Growth in Tunisia: Cointegration and Structural Break Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), pages 1104-1122.
    10. Wesseh, Presley K. & Lin, Boqiang, 2016. "Factor demand, technical change and inter-fuel substitution in Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 979-991.
    11. Azam, Muhammad & Khan, Abdul Qayyum & Bakhtyar, B. & Emirullah, Chandra, 2015. "The causal relationship between energy consumption and economic growth in the ASEAN-5 countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 732-745.
    12. Atef Saad Alshehry & Mounir Belloumi, 2014. "Investigating the Causal Relationship between Fossil Fuels Consumption and Economic Growth at Aggregate and Disaggregate Levels in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, pages 531-545.

    More about this item

    Keywords

    Energy consumption; Economic growth; Cointegration; Granger causality;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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