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The relationship between an electricity supply ceiling and economic growth: An application of disequilibrium modeling to Taiwan

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  • Mototsugu Fukushige

    (Graduate School of Economics, Osaka University)

  • Hiroshige Yamawaki

    (Graduate School of Economics, Osaka University)

Abstract

Using a disequilibrium model, we investigate the relationship between the supply constraint of electricity generation capacity and electricity demand in Taiwan. We find that electricity consumption faced supply constraints in Taiwan between 1959 and 1972, but that after 1973 generation capacity grew rapidly, such that economic growth came to be the major determinant of electricity consumption. Our experience in fitting this disequilibrium model suggests that simple causality tests are not a proper means to understand the relationship between electricity consumption and economic growth. Our results also suggest, at least for developing countries, that an electricity supply constraint sometimes plays an important role when investigating the relationship between energy consumption and economic growth.

Suggested Citation

  • Mototsugu Fukushige & Hiroshige Yamawaki, 2013. "The relationship between an electricity supply ceiling and economic growth: An application of disequilibrium modeling to Taiwan," Discussion Papers in Economics and Business 13-11, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1311
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    2. Michael C. Huang & Nobuhiro Hosoe, 2015. "Investigating Fiscal and Social Costs of Recovery Policy: A Dynamic General Equilibrium Analysis of a Compound Disaster in Northern Taiwan," GRIPS Discussion Papers 15-01, National Graduate Institute for Policy Studies.
    3. Michael C. Haung & Nobuhiro Hosoe, 2016. "Computable General Equilibrium Assessment Of A Compound Disaster In Northern Taiwan," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 28(2), pages 89-106, July.
    4. Zhang, Chi & Zhou, Kaile & Yang, Shanlin & Shao, Zhen, 2017. "On electricity consumption and economic growth in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 353-368.

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    More about this item

    Keywords

    Electricity Supply; Economic Growth; Disequilibrium Model; Taiwan;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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