On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correction approach

1997 ◽  
Vol 19 (4) ◽  
pp. 417-440 ◽  
Author(s):  
Abul M.M. Masih ◽  
Rumi Masih
Keyword(s):  
Energy Consumption ◽  
Error Correction ◽  
Causal Relationship ◽  
Real Income ◽  
Vector Error Correction ◽  
Vector Error ◽  
Energy Dependent ◽  
New Evidence ◽  
Multivariate Cointegration

scholarly journals Financial Development and Energy Consumption in Sub-Saharan Africa: Evidence From Panel Vector Error Correction Model

SAGE Open ◽  
2020 ◽  
Vol 10 (3) ◽  
pp. 215824402093543
Author(s):  
Chigozie Nelson Nkalu ◽  
Samuel Chinwero Ugwu ◽  
Fredrick O. Asogwa ◽  
Mwuese Patricia Kuma ◽  
Queen O. Onyeke
Keyword(s):  
Energy Consumption ◽  
Error Correction ◽  
Granger Causality ◽  
Financial Development ◽  
Sub Saharan Africa ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Sub Saharan

This study examines the nexus between financial development and energy consumption/use in Sub-Saharan Africa (SSA) using a panel vector error correction model (VECM), cointegration, and Granger causality tests over the period ranging from 1975 to 2017. The annual panel time-series data generated from the World Bank database were tested for unit-roots processing using both the Levin–Lin–Chu and Im–Pesaran–Shin before proceeding to Johanson cointegration technique, the results of which motivated the choice of adopting the panel VECM rather than panel vector autoregression in the methodology. From the estimation result especially on the variables of interest, there exists a positive and statistically significant relationship between financial development and energy consumption in the long run, but not statistically significant in the short run. Further findings from the panel Granger causality test shows a unidirectional causality running from financial development to energy consumption, gross domestic product per capita, population growth to urbanization with no feedback. Among a series of policy recommendations, the monetary authorities in Sub-Saharan African countries should ensure optimal utilization of financial instruments and technologies available in the system to enhance more robust financial development to boost efficiency in energy consumption in the region in line with the sustainable growth theory.

scholarly journals Does Trade Openness Reduce Inflation? Empirical Evidence from Pakistan

2010 ◽  
Vol 15 (2) ◽  
pp. 35-50 ◽  
Author(s):  
Tahir MukhtarF
Keyword(s):  
Error Correction ◽  
Trade Liberalization ◽  
Trade Openness ◽  
Cointegration Test ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Multivariate Cointegration

One of the more celebrated propositions found in international trade is the case that trade liberalization is associated with declining prices, so that protectionism is inflationary. In line with this view, Romer (1993) postulates the hypothesis that inflation is lower in small and open economies. The objective of this study is to examine Romer’s hypothesis in Pakistan. For this purpose, we have used multivariate cointegration and a vector error correction model. The study covers the period from 1960 to 2007. The empirical findings under the cointegration test show that there is a significant negative long-run relationship between inflation and trade openness, which confirms the existence of Romer’s hypothesis in Pakistan.

scholarly journals Analisis Kausalitas antara Investasi, Pendapatan Nasional, dan Jumlah Uang Beredar

2020 ◽  
Vol 3 (1) ◽  
pp. 606-615
Author(s):  
Asila Murdiah ◽  
Prasetyo Ari Bowo
Keyword(s):  
Error Correction ◽  
Causal Relationship ◽  
Granger Causality ◽  
Money Supply ◽  
National Income ◽  
Error Correction Model ◽  
Vector Error Correction Model ◽  
Correction Model ◽  
Vector Error Correction ◽  
Vector Error

The relationship between investment, national income and money supply are interrelated. Increased investment can increase national income. Likewise, the increase in national income can increase investment. Besides investment increase can also increase the money supply. As investment increases, the national income will increase, which means an increase in people's income. The increase in people's income will lead to increased public consumption that would cause an increase in the money supply. If there is excess supply of money, Bank Indonesia will take the policy to reduce interest rates. These conditions will encourage investors to invest which in turn will increase the output and national income. This study aims to prove the causal relationship between the investment, national income and the amount of money circulating in Indonesia period 2007.1-2015.4. To prove the existence of a causal relationship between the study variables then performed Granger causality test method VECM (Vector Error Correction Model). Granger causality analysis results show that, first, there is a causal relationship between national income and investment. Secondly, there is a causal relationship between the national income and the money supply. Third, there is no causal relationship between investment and money supply. Hubungan antara investasi, pendapatan nasional dan jumlah uang beredar saling berkaitan. Peningkatan investasi dapat meningkatkan pendapatan nasional. Begitu pula sebaliknya, peningkatan pendapatan nasional dapat meningkatkan investasi. Selain itu peningkatan investasi juga dapat meningkatkan jumlah uang beredar. Ketika investasi meningkat maka pendapatan nasional akan meningkat yang berarti terjadi peningkatan pendapatan masyarakat. Kenaikan pendapatan masyarakat ini akan menyebabkan konsumsi masyarakat meningkat sehingga akan menyebabkan kenaikan jumlah uang beredar. Apabila terjadi kelebihan jumlah uang beredar, Bank Indonesia akan mengambil kebijakan penurunan tingkat suku bunga. Kondisi ini akan mendorong minat investor untuk berinvestasi yang pada akhirnya akan meningkatkan output dan pendapatan nasional. Penelitian ini bertujuan untuk membuktikan adanya hubungan kausalitas antara investasi, pendapatan nasional dan jumlah uang beredar di Indonesia periode 2007.1-2015.4. Untuk membuktikan ada tidaknya hubungan kausalitas antarvariabel penelitian maka dilakukan uji kausalitas Granger dengan metode VECM (Vector Error Correction Model). Hasil analisis kausalitas Granger menunjukkan bahwa, pertama, terdapat hubungan kausalitas antara pendapatan nasional dan investasi. Kedua, terdapat hubungan kausalitas antara pendapatan nasional dan jumlah uang beredar. Ketiga, tidak terdapat hubungan kausalitas antara investasi dan jumlah uang beredar.

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