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The Relationship between Electricity Consumption and GDP in Albania, Bulgaria and Slovenia

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  • Rozeta Simonovska

    (University “Ss. Cyril and Methodius”, Faculty of Economics, Skopje, Macedonia)

Abstract

This paper investigates the causal relationship between electricity consumption and GDP in Slovenia, for the time period 1990-2010 and in Albania and Bulgaria for the time period 1980-2010. The causality is tested with the Granger causality test. But first we check whether or not the time series of GDP and electricity consumption are stationary. The augmented Dickey-Fuller (ADF) test and Phillips-Perron test are used to evaluate whether these two series have unit root. It can be concluded that the first differences of the two time series are stationary, i.e., they are integrated of order 1. The Johansen cointegration test shows that there is no cointegration equation for GDP and electricity consumption in these three countries. From the Granger causality test it can be concluded that there is unidirectional causality from GDP to electricity consumption for 2 and 5 years lags and a unidirectional causality from electricity consumption to GDP for 1 year lag. In the case of Albania and Slovenia the results suggest that there is no causality between electricity consumption and GDP.

Suggested Citation

  • Rozeta Simonovska, 2015. "The Relationship between Electricity Consumption and GDP in Albania, Bulgaria and Slovenia," Hyperion Economic Journal, Faculty of Economic Sciences, Hyperion University of Bucharest, Romania, vol. 3(3), pages 55-62, September.
    • Handle: RePEc:hyp:journl:v:3:y:2015:i:3:p:55-62
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    References listed on IDEAS

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    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
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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