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Energy consumption and economic growth: Evidence from Vietnam

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  • Ha Minh Nguyen

    (Ho Chi Minh City Open University, Vietnam.)

  • Ngoc Hoang Bui

    (Graduate School, Ho Chi Minh City Open University, Vietnam, University of Labour and Social Affairs, Vietnam.)

  • Duc Hong Vo

    (Business and Economics Research Group Ho Chi Minh City Open University, Vietnam.)

  • Michael McAleer

    ( Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)

Abstract

The importance of non-renewable, renewable and sustainable energy sources and energy consumption in the economic development strategy of a country is undeniable. The purpose of the paper is to investigate the impacts of energy consumption on the economic growth of Vietnam during the 1980-2014 period. By applying the Autoregressive Distributed Lag (ARDL) model of Pesaran et al. (2001), and the Granger causality test of Toda and Yamamoto (1995), the empirical results provide evidence that electricity consumption has positive impacts on Vietnam’s economic growth in both the short run and long run. For public policy prescriptions, the empirical evidence suggests that an exploration of new sources of renewable and sustainable energy is essential for long run economic development.

Suggested Citation

  • Ha Minh Nguyen & Ngoc Hoang Bui & Duc Hong Vo & Michael McAleer, 2019. "Energy consumption and economic growth: Evidence from Vietnam," Documentos de Trabajo del ICAE 2019-10, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
  • Handle: RePEc:ucm:doicae:1910
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    Keywords

    Energy consumption; Renewable and sustainable energy; Economic growth; Economic development; ARDL; Granger causality.;

    JEL classification:

    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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