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New Evidence on the Relationship Between Crude Oil Consumption and Economic Growth in the US: A Quantile Causality and Cointegration Approach

Author

Listed:
  • Amine Lahiani

    (LEO - Laboratoire d'Économie d'Orleans [FRE2014] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)

  • Ramzi Benkraiem

    (Audencia Business School)

  • Anthony Miloudi

    (Excelia Group | La Rochelle Business School, CRIEF [Poitiers] - Centre de recherche sur l'intégration économique et financière [EA 2249] - UP - Université de Poitiers = University of Poitiers)

  • Muhammad Shahbaz

    (Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School)

Abstract

This paper investigates the long-run and short-run relationship between WTI crude oil consumption and economic growth, covering the US economy for the period from 1955Q1 to 2016Q4. The Quantile ARDL approach developed by Cho et al. (2015) is applied to examine the long-run cointegrating relationship between the variables. Additionally, a quantile Granger causality test developed by Troster (2017) is also applied to examine the causal association between crude oil consumption and economic growth. The empirical evidence underscores the presence of nonlinearities and locational asymmetries. The growth hypothesis holds for the smallest quantiles, suggesting a unidirectional causality relationship running from oil consumption to economic growth. A feedback effect between oil consumption and economic growth is found for the medium quantiles. This empirical evidence has concrete implications for economists and energy policy makers.

Suggested Citation

  • Amine Lahiani & Ramzi Benkraiem & Anthony Miloudi & Muhammad Shahbaz, 2019. "New Evidence on the Relationship Between Crude Oil Consumption and Economic Growth in the US: A Quantile Causality and Cointegration Approach," Post-Print hal-03676181, HAL.
    • Handle: RePEc:hal:journl:hal-03676181
    DOI: 10.1007/s40953-018-0147-2
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    Cited by:

    1. Georgios Bertsatos & Plutarchos Sakellaris & Mike G. Tsionas, 2022. "Correction to: Extensions of the Pesaran, Shin and Smith (2001) bounds testing procedure," Empirical Economics, Springer, vol. 62(2), pages 635-635, February.
    2. Mumtaz Ali & Mehdi Seraj & Fatma Turuc & Turgut Tursoy & Khusniddin Fakhriddinovich Uktamov, 2024. "Green finance investment and climate change mitigation in OECD-15 European countries: RALS and QARDL evidence," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 27409-27429, November.
    3. Ibrahim Mohamed Ali Ali, 2023. "Income inequality, economic growth, and structural changes in Egypt: new insights from quantile cointegration approach," Economic Change and Restructuring, Springer, vol. 56(1), pages 379-407, February.
    4. Su, Chi-Wei & Qin, Meng & Tao, Ran & Umar, Muhammad, 2020. "Does oil price really matter for the wage arrears in Russia?," Energy, Elsevier, vol. 208(C).
    5. Lasisi, Taiwo Temitope & Alola, Andrew Adewale & Muoneke, Obumneke Bob & Eluwole, Kayode Kolawole, 2022. "The moderating role of environmental-related innovation and technologies in growth-energy utilization nexus in highest-performing eco-innovation economies," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    6. Lee, Chi-Chuan & Lee, Chien-Chiang, 2020. "Insurance activity, real output, and geopolitical risk: Fresh evidence from BRICS," Economic Modelling, Elsevier, vol. 92(C), pages 207-215.
    7. Guo, Yawei & Li, Jianping & Li, Yehua & You, Wanhai, 2021. "The roles of political risk and crude oil in stock market based on quantile cointegration approach: A comparative study in China and US," Energy Economics, Elsevier, vol. 97(C).
    8. Priya, Pragati & Pal, Debdatta, 2024. "Does crude oil price volatility respond asymmetrically to financial shocks?," Resources Policy, Elsevier, vol. 92(C).

    More about this item

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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