Multivariate Granger Causality between Electricity Consumption, Exports and GDP: Evidence from a Panel of Middle Eastern Countries

Energy Policy, 37(1): 229-236, 2009

Posted: 11 Jun 2012

See all articles by Paresh Kumar Narayan

Paresh Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Russell Smyth

Monash University - Department of Economics

Date Written: 2009

Abstract

This paper examines the causal relationship between electricity consumption, exports and gross domestic product (GDP) for a panel of Middle Eastern countries. We find that for the panel as a whole there are statistically significant feedback effects between these variables. A 1 per cent increase in electricity consumption increases GDP by 0.04 per cent, a 1 percent increase in exports increases GDP by 0.17 per cent and a 1 percent increase in GDP generates a 0.95 percent increase in electricity consumption. The policy implications are that for the panel as a whole these countries should invest in electricity infrastructure and step up electricity conservation policies to avoid a reduction in electricity consumption adversely affecting economic growth. Further policy implications are that for the panel as a whole promoting exports, particularly non-oil exports, is a means to promote economic growth and that expansion of exports can be realized without having adverse effects on energy conservation policies.

Suggested Citation

Narayan, Paresh Kumar and Smyth, Russell, Multivariate Granger Causality between Electricity Consumption, Exports and GDP: Evidence from a Panel of Middle Eastern Countries (2009). Energy Policy, 37(1): 229-236, 2009 , Available at SSRN: https://ssrn.com/abstract=2081298

Paresh Kumar Narayan (Contact Author)

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

221 Burwood Highway
Burwood, Victoria 3215
Australia

Russell Smyth

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
412
PlumX Metrics