The Electricity Consumption and GDP Nexus for the Fiji Islands

Posted: 2 Jun 2012 Last revised: 7 Jun 2012

See all articles by Paresh Kumar Narayan

Paresh Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Baljeet Singh Bagga

affiliation not provided to SSRN

Date Written: May 9, 2006

Abstract

Fiji is a small open island economy dependent on energy for its growth and development; hence, the relationship between energy consumption and economic growth is crucial for Fiji's development. In this paper, we investigate the nexus between electricity consumption and economic growth for Fiji within a multivariate framework through including the labour force variable. We use the bounds testing approach to cointegration and find that electricity consumption, GDP and labour force are only cointegrated when GDP is the endogenous variable. We use the Granger causality F-test and find that in the long-run causality runs from electricity consumption and labour force to GDP, implying that Fiji is an energy dependent country and thus energy conservation policies will have an adverse effect on Fiji's economic growth.

Keywords: Fiji, Bounds testing approach to cointegration, Granger causality

Suggested Citation

Narayan, Paresh Kumar and Bagga, Baljeet Singh, The Electricity Consumption and GDP Nexus for the Fiji Islands (May 9, 2006). Energy Economics, Vol. 29, No. 1141-1150, 2007, Available at SSRN: https://ssrn.com/abstract=2072319

Paresh Kumar Narayan (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Baljeet Singh Bagga

affiliation not provided to SSRN ( email )

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