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Does electricity consumption panel Granger cause GDP? A new global evidence

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  • Narayan, Paresh Kumar
  • Narayan, Seema
  • Popp, Stephan

Abstract

The goal of this paper is to undertake a panel data investigation of long-run Granger causality between electricity consumption and real GDP for seven panels, which together consist of 93 countries. We use a new panel causality test and find that in the long-run both electricity consumption and real GDP have a bidirectional Granger causality relationship except for the Middle East where causality runs only from GDP to electricity consumption. Finally, for the G6 panel the estimates reveal a negative sign effect, implying that increasing electricity consumption in the six most industrialised nations will reduce GDP.

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Article provided by Elsevier in its journal Applied Energy.

Volume (Year): 87 (2010)
Issue (Month): 10 (October)
Pages: 3294-3298

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Handle: RePEc:eee:appene:v:87:y:2010:i:10:p:3294-3298
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Keywords: C22 Real GDP Electricity consumption Panel Granger causality;

Find related papers by JEL classification:

  • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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  1. Chen, Shiu-Sheng & Chen, Hung-Chyn, 2007. "Oil prices and real exchange rates," Energy Economics, Elsevier, vol. 29(3), pages 390-404, May.
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  15. Narayan, Paresh Kumar & Narayan, Seema & Popp, Stephan, 2010. "A note on the long-run elasticities from the energy consumption-GDP relationship," Applied Energy, Elsevier, vol. 87(3), pages 1054-1057, March.
  16. Narayan, Paresh Kumar & Wong, Philip, 2009. "A panel data analysis of the determinants of oil consumption: The case of Australia," Applied Energy, Elsevier, vol. 86(12), pages 2771-2775, December.
  17. Narayan, Paresh Kumar & Prasad, Arti, 2008. "Electricity consumption-real GDP causality nexus: Evidence from a bootstrapped causality test for 30 OECD countries," Energy Policy, Elsevier, vol. 36(2), pages 910-918, February.
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Cited by:

  1. Brantley Liddle, 2013. "The Energy, Economic Growth, Urbanization Nexus Across Development: Evidence from Heterogeneous Panel Estimates Robust to Cross-Sectional Dependence," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
  2. Kankal, Murat & AkpInar, Adem & Kömürcü, Murat Ihsan & Özsahin, Talat Sükrü, 2011. "Modeling and forecasting of Turkey's energy consumption using socio-economic and demographic variables," Applied Energy, Elsevier, vol. 88(5), pages 1927-1939, May.
  3. Narayan, Paresh Kumar & Popp, Stephan, 2012. "The energy consumption-real GDP nexus revisited: Empirical evidence from 93 countries," Economic Modelling, Elsevier, vol. 29(2), pages 303-308.
  4. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Ym & Sab, Che Normee Binti Che, 2013. "Examining the bi-directional long run relationship between renewable energy consumption and GDP growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 209-222.
  5. Al-mulali, Usama & Tang, Chor Foon & Ozturk, Ilhan, 2015. "Estimating the Environment Kuznets Curve hypothesis: Evidence from Latin America and the Caribbean countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 918-924.
  6. Fatih Karanfil & Yuanjing Li, 2014. "Electricity consumption and economic growth: exploring panel‐specific differences," Working Papers 2014-337, Department of Research, Ipag Business School.
  7. Paresh Narayan & Russell Smyth, 2014. "Applied Econometrics and a Decade of Energy Economics Research," Monash Economics Working Papers 21-14, Monash University, Department of Economics.
  8. Liddle, Brantley & Lung, Sidney, 2015. "Revisiting energy consumption and GDP causality: Importance of a priori hypothesis testing, disaggregated data, and heterogeneous panels," Applied Energy, Elsevier, vol. 142(C), pages 44-55.
  9. Ou, Xunmin & Xiaoyu, Yan & Zhang, Xiliang, 2011. "Life-cycle energy consumption and greenhouse gas emissions for electricity generation and supply in China," Applied Energy, Elsevier, vol. 88(1), pages 289-297, January.
  10. Dedeoğlu, Dinçer & Kaya, Hüseyin, 2013. "Energy use, exports, imports and GDP: New evidence from the OECD countries," Energy Policy, Elsevier, vol. 57(C), pages 469-476.
  11. Liddle, Brantley & Lung, Sidney, 2013. "The long-run causal relationship between transport energy consumption and GDP: Evidence from heterogeneous panel methods robust to cross-sectional dependence," Economics Letters, Elsevier, vol. 121(3), pages 524-527.
  12. Bashiri Behmiri, Niaz & Pires Manso, José R., 2012. "Crude oil conservation policy hypothesis in OECD (organisation for economic cooperation and development) countries: A multivariate panel Granger causality test," Energy, Elsevier, vol. 43(1), pages 253-260.
  13. Evan Lau & Xiao-Hui Chye & Chee-Keong Choong, 2011. "Energy-Growth Causality: Asian Countries Revisited," International Journal of Energy Economics and Policy, Econjournals, vol. 1(4), pages 140-149.
  14. Sharma, Susan Sunila, 2011. "Determinants of carbon dioxide emissions: Empirical evidence from 69 countries," Applied Energy, Elsevier, vol. 88(1), pages 376-382, January.
  15. Al-Mulali, Usama & Ozturk, Ilhan, 2014. "Are energy conservation policies effective without harming economic growth in the Gulf Cooperation Council countries?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 639-650.
  16. Phiri, Andrew & Nyoni, Botha, 2014. "The electricity-growth nexus in South Africa: Evidence from asymmetric co-integration and co-feature analysis," MPRA Paper 56145, University Library of Munich, Germany.

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