scholarly journals Causality between Energy Consumption and Economic Growth: The Case of Pakistan

2008 ◽  
Vol 13 (2) ◽  
pp. 45-58 ◽  
Author(s):  
Qazi Muhammad Adnan Hye ◽  
Sana Riaz
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Annual Data ◽  
Energy Prices ◽  
Bounds Testing ◽  
Causality Test ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
The Cost

This study seeks to determine the direction of causality between energy consumption (EC) and economic growth (EG), using annual data from 1971 to 2007. In our empirical analysis, we implement a bounds-testing approach to co-integration and an augmented form of the Granger causality test to identify the direction of the relationship between these variables both in the short and long run. Our findings suggest bidirectional causality between EG and EC in the short run; in the long run we find unidirectional causality from EG to EC. EC does not lead to EG in the long run because higher energy prices (oil prices) increase the cost of business, leading to a negative effect on EG. Additionally, when energy prices fluctuate, they create uncertainty that also affects economic growth. The study recommends direct investment in local energy resources.

scholarly journals Economic Development, CO2 Emissions and Energy Use Nexus-Evidence from the Danube Region Countries

Energies ◽  
2021 ◽  
Vol 14 (11) ◽  
pp. 3165
Author(s):  
Eva Litavcová ◽  
Jana Chovancová
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Co2 Emissions ◽  
Carbon Emissions ◽  
Bounds Testing ◽  
Mutual Cooperation ◽  
Long Run ◽  
Short Run ◽  
Danube Region ◽  
The Impact

The aim of this study is to examine the empirical cointegration, long-run and short-run dynamics and causal relationships between carbon emissions, energy consumption and economic growth in 14 Danube region countries over the period of 1990–2019. The autoregressive distributed lag (ARDL) bounds testing methodology was applied for each of the examined variables as a dependent variable. Limited by the length of the time series, we excluded two countries from the analysis and obtained valid results for the others for 26 of 36 ARDL models. The ARDL bounds reliably confirmed long-run cointegration between carbon emissions, energy consumption and economic growth in Austria, Czechia, Slovakia, and Slovenia. Economic growth and energy consumption have a significant impact on carbon emissions in the long-run in all of these four countries; in the short-run, the impact of economic growth is significant in Austria. Likewise, when examining cointegration between energy consumption, carbon emissions, and economic growth in the short-run, a significant contribution of CO2 emissions on energy consumptions for seven countries was found as a result of nine valid models. The results contribute to the information base essential for making responsible and informed decisions by policymakers and other stakeholders in individual countries. Moreover, they can serve as a platform for mutual cooperation and cohesion among countries in this region.

Does Temperature Contribute to Environment Degradation? Pakistani Experience Based on Nonlinear Bounds Testing Approach

2020 ◽  
pp. 097215092091665 ◽  
Author(s):  
Muhammad Saeed Meo ◽  
Solomon Prince Nathaniel ◽  
Muhammad Murtaza Khan ◽  
Qasim Ali Nisar ◽  
Tehreem Fatima
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Energy Use ◽  
Global Climate ◽  
Bounds Testing ◽  
Renewable Energy Consumption ◽  
Global Climate Changes ◽  
Long Run ◽  
Short Run

Many developing countries are acutely vulnerable to global climate changes. In Pakistan, carbon emissions are primarily contributed by the factor of energy production from oil, gas and coal. The objective of this study is to estimate the asymmetric impact of temperature, energy use, economic growth, water scarcity on CO2 emissions in Pakistan over their period of 1960–2016. Based on nonlinear bounds testing (NARDL) approach, it is confirmed that there is an asymmetric relationship between temperature and CO2 emission, while energy use, population growth and economic growth have a positive effect in the short run. In the long run, energy consumption and economic growth were found to increase emission, while a temperature decrease by 1 per cent leads to 5 per cent decrease in carbon emissions. Population and water availability also reduces emission in Pakistan. Further, the study also confirms the long-run relationship between the variables. The finding of the study noticeably supports the policy to increase renewable energy consumption.

scholarly journals Currency depreciation and output nexus: Evidence from Pakistan

2018 ◽  
Vol 65 (2) ◽  
pp. 183-200
Author(s):  
Muhammad Nawaz ◽  
Ejaz Ghani
Keyword(s):  
Open Economy ◽  
Developing Economies ◽  
Strong Support ◽  
Annual Data ◽  
Bounds Testing ◽  
Policy Regime ◽  
Currency Depreciation ◽  
Long Run ◽  
Negative Effect ◽  
Short Run

Currency depreciation as a channel of output management has been a hot and controversial topic in both developed and developing economies. In Pakistan?s case, relevant research would require study of annual data available for the period 1972 to 2010. The stationarity of variables under consideration at different orders require the application of the bounds testing approach to cointegration. The findings based on open economy IS-LM framework induce a negative effect of currency depreciation on output levels. This is consistent with the long-run estimates of the autoregressive distributive lag (ARDL) model. The short-run estimates of error-correction model (ECM) may lead to significant increment in output levels because of the depreciation of Pakistan rupee. Government spending may cause to reduce the output in the short-run, as well as, in long-run which furnishes strong support to crowding out hypothesis. The terms of trade, positive in the short-run, are negatively related to output in the long-run. However, surprise money has been insignificant in both long-run and short-run ECM. The country would need a clear long-term policy regime that inspires trust of the international community and restores the exporters? confidence.

FINANCIAL INTEGRATION, ENERGY CONSUMPTION AND ECONOMIC GROWTH IN VIETNAM

2020 ◽  
Vol 15 (03) ◽  
pp. 2050010
Author(s):  
NGUYEN MINH HA ◽  
BUI HOANG NGOC ◽  
MICHAEL MCALEER
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Integration ◽  
Positive Impact ◽  
Vector Autoregressions ◽  
Bounds Testing ◽  
Causality Test ◽  
Empirical Results ◽  
Long Run ◽  
The Impact

The paper investigates the impact of financial integration and energy consumption on economic growth in Vietnam during the period 1986–2017. By applying the Autoregressive Distributed Lag ARDL) approach proposed by Pesaran et al. [Pesaran, MH, Y Shin and RJ Smith (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.] and the bounds cointegration test, the empirical results show the existence of long-term cointegration among all the variables, and that an increase in financial integration leads to an increase in economic growth in the long run. There is a positive impact of energy consumption on growth in both the short run and long run. The causality test of Toda and Yamamoto [Toda, HY and T Yamamoto (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1–2), 225–250.] confirm that there is bi-directional causality between the pairs, financial integration and economic growth, and energy consumption and growth, which support the feedback hypothesis. However, there is only uni-directional causality from energy consumption to financial integration. The empirical results should be of major empirical importance for public policy decision-makers to plan sustainable development goals for Vietnam.

scholarly journals Government Spending and Economic Growth in Ghana: Evidence from Granger Causality Analysis

2017 ◽  
Vol 3 (2) ◽  
pp. 50-58 ◽  
Author(s):  
Lucy Anning ◽  
Wang Haisu ◽  
Joshua Sunday Riti
Keyword(s):  
Economic Growth ◽  
Granger Causality ◽  
Government Spending ◽  
Causality Analysis ◽  
Economic Activities ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

In spite of the diverse major issues affecting the economy of Ghana over the years, the economy continues to experience a downward spiral in its economic growth. Taking into account three opining views regarding government spending and economic growth, this study sets to investigate the causal nexus fractious and economic growth in Ghana. We apply the autoregressive distributed lag (ARDL) bounds testing approach to co-integration and the vector error correction model (VECM)-Granger causality test to evaluate both long- and short-run parameters including the direction of causation with data spanning from 1980 and 2015.The empirical results show evidence of co-integration for the existence of a long-run relationship between the dependent and independent variables. The Granger causality tests, in addition, indicated causal independence between government spending and economic growth within the time framework of the study in the economy of Ghana. Government spending has a cause effect on economic growth in Ghana. However, government spending channeled into a more fractious use with the building of resilience and infrastructural development that are self-liquidating if encouraged will enhance economic activities in the short run and also propel growth in the long run in the Ghana.

scholarly journals Impact of Industrialization, Urbanization and Energy Consumption on Environmental Degradation: Evidence from India

2019 ◽  
Vol IV (II) ◽  
pp. 1-12
Author(s):  
Sohail Farooq ◽  
Shabana Parveen ◽  
Habib Elahi Sahibzada
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Linear Regression ◽  
Linear Regression Model ◽  
Energy Use ◽  
Annual Data ◽  
Long Run ◽  
Study Results ◽  
Augmented Dickey Fuller ◽  
Negative Effect

Industrialization and Urbanization are the important pillars for economic growth in a country however, a threat to the natural environment. The major aim of this study is to empirically analyze the effect of industrialization, urbanization, and energy consumption on the environment in India. Annual data for the span of 1975-2018 is analyzed. Augmented Dickey-Fuller (ADF) and (PP) tests are adopted for checking the stationarity. After confirming long-run cointegration in all the variables, the study used a linear regression model for the estimates of the value of the coefficient of the variables. The estimates of the model show urbanization and consumption of energy have a positive significant (negative effect on the environment) whereas industrialization has a negative insignificant impact on emissions of CO2. It is recommended based on this study results that real planning regarding urbanization along with energy use is the need for the Indian economy, to control the high emissions of CO2.

scholarly journals Energy consumption and economic growth in Ethiopia: A dynamic causal linkage

2018 ◽  
Vol 29 (8) ◽  
pp. 1393-1412 ◽  
Author(s):  
Sheilla Nyasha ◽  
Yvonne Gwenhure ◽  
Nicholas M Odhiambo
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Granger Causality ◽  
Trade Openness ◽  
Bounds Testing ◽  
Policy Makers ◽  
Long Run ◽  
Short Run ◽  
Variable Bias ◽  
Causality Model

In this study, we have explored the causal relationship between energy consumption and economic growth in Ethiopia, during the period from 1971 to 2013. We have employed a multivariate Granger-causality framework that incorporates financial development, investment and trade openness as intermittent variables – in an effort to address the omission-of-variable bias. Based on the newly developed ARDL bounds testing approach to co-integration and the error-correction model-based causality model, our results show that in Ethiopia, there is a distinct unidirectional Granger-causality from economic growth to energy consumption. These results apply, irrespective of whether the estimation is done in the short run or in the long run. We recommend that policy makers in Ethiopia should consider expanding their energy-mix options, in order to cope with the future demand arising from the real sector growth.

scholarly journals Causality Between Public Debt, Public Debt Service and Economic Growth in an Emerging Economy

2020 ◽  
Vol 65 (1) ◽  
pp. 1-19
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Debt Service ◽  
Bounds Testing ◽  
Causality Test ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run

AbstractThis paper explores the causality between public debt, public debt service and economic growth in South Africa covering the period 1970 – 2017. The study employs the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and the multivariate Granger-causality test. The empirical results indicate that there is unidirectional causality from economic growth to public debt, but only in the short run. However, the study fails to establish any causality between public debt service and economic growth, both in the short run and long run. In line with the empirical evidence, the study concludes that it is economic growth that drives public debt in South Africa, and that the causal relationship between public debt and economic growth is sensitive to the timeframe considered. The paper recommends policymakers in South Africa to consider growth-enhancing policies in the short run, since poor economic performances may lead to high public debt levels.

scholarly journals Energy Consumption and Four Growth Hypotheses: an Evidence From Saarc Nations

2020 ◽  
Vol 6 (4) ◽  
pp. 833-843
Author(s):  
Shafqut Ullah ◽  
Tahir Mahmood
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Unit Root ◽  
Regional Level ◽  
Empirical Literature ◽  
Causality Test ◽  
Panel Unit Root ◽  
Data Framework ◽  
Long Run ◽  
Short Run

The contemporaneous study investigates the directional relationship between economic growth and energy consumption for four selected SAARC nations from 1990 to 2018 within a panel-data framework. In the empirical literature, conservation, growth, feedback, and neutral hypotheses exist between energy and economic growth. First, study implies a Granger causality test to find the short-run directional relationship. Secondly, it checks the order of panel unit root that is a prerequisite condition for cointegration particularly when we have a long panel.  In the end, based on panel unit root, the study estimates the model with the help of FMOLS to find a long-run relationship. The present study explores the conservation hypothesis in the short run at the regional level for Bangladesh and Pakistan. While the feedback hypothesis and neutral hypothesis exist in case of India and Sri-Lanka respectively. On the other hand, in the long run, there is cointegration between economic growth and energy use, while the direction conforms to the feedback hypothesis in our panel after allowing heterogeneous cross-sectional effect. Thus, energy and economic growth are coupled with each other in the long run at a regional level whereas, energy as a factor of the production process does not contribute significantly in the short run. It is because this region is labour abundant, therefore, the share of energy is significantly low in the final output as compared to developed nations. Consequently, the availability of energy at affordable prices truly matters for developing nations of SAARC.

scholarly journals Re-examining the impact of financial intermediation on economic growth: evidence from Turkey

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ibrahim Nandom Yakubu ◽  
Aziza Hashi Abokor ◽  
Iklim Gedik Balay
Keyword(s):  
Economic Growth ◽  
Financial Intermediation ◽  
Composite Index ◽  
Principal Component ◽  
Annual Data ◽  
Bounds Testing ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
The Impact

PurposeThis study seeks to investigate the impact of financial intermediation on economic growth in Turkey using annual data spanning 1970–2017.Design/methodology/approachBased on the results of the augmented Dickey–Fuller and Phillips–Perron unit root tests for stationarity, the authors employ the Autoregressive Distributed Lag (ARDL) bounds testing to cointegration to establish the long-run impact of financial intermediation alongside other control factors on economic growth. The study also examines the short-run relationship between financial intermediation and economic growth by estimating the Error Correction Model (ECM).FindingsThe authors’ findings indicate that financial intermediation significantly influences economic growth in both short and long run. However, the effect is positive only in the short run, lending support to the supply-leading hypothesis. Regarding the control variables, the authors observe that while financial openness shows a positive significant impact on economic growth in the long run, gross fixed capital formation matters only in the short run. The results further infer that regardless of the time period, inflation impedes economic growth.Originality/valueIn the empirical analysis of the relationship between financial intermediation and economic growth, financial intermediation is always measured using a single variable. The authors argue that such studies could produce bias and misleading results given that a single proxy does not adequately reflect financial intermediation activities. Likewise, such findings may delude policy implementation. To provide a more vivid and robust analysis, the authors employ the Principal Component Analysis (PCA) to construct a composite index for financial intermediation based on three broad measures. The researchers’ are unaware of any study on the financial intermediation–economic growth nexus using a composite index of financial intermediation. Thus, this paper fills this lacuna in the literature.

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