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Revisiting Energy Consumption and GDP: Evidence from Dynamic Panel Data Analysis

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  • Nayan, Sabri
  • Kadir, Norsiah
  • Ahmad, Mahyudin
  • Abdullah, Mat Saad

Abstract

In recent years the issues of energy consumption and economic development have become the concern of many parties, particularly policy makers. The empirical outcomes of previous studies examining the relationship between energy consumption and economic growth have been inconclusive and conflicting due to different sample periods, variables used, countries studied and econometric techniques employed. Utilising dynamic panel data GMM-system estimator on datasets of selected 23 countries across 12 years ranging from 2000-2011, this paper shows evidence of uni-directional causality between energy consumption and GDP. In energy consumption model, the GDP is found to significantly determine energy consumption, whereas in the GDP model, energy consumption has however less significant effect on GDP. Energy price and investment are the other important determinants of energy consumption and income, respectively.

Suggested Citation

  • Nayan, Sabri & Kadir, Norsiah & Ahmad, Mahyudin & Abdullah, Mat Saad, 2013. "Revisiting Energy Consumption and GDP: Evidence from Dynamic Panel Data Analysis," MPRA Paper 48714, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:48714
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    References listed on IDEAS

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    17. Suleman Sarwar & Rida Waheed & Mehnoor Amir & Muqaddas Khalid, 2018. "Role of Energy on Economy The Case of Micro to Macro Level Analysis," Economics Bulletin, AccessEcon, vol. 38(4), pages 1905-1926.
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    More about this item

    Keywords

    Energy consumption; Economic growth; Panel Data Analysis; System GMM.;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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    This paper has been announced in the following NEP Reports:

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