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Economic growth and electricity consumption: MS‐VAR and MS ‐ G ranger causality analysis
Author(s) -
Bildirici Melike E.
Publication year - 2013
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12011
Subject(s) - electricity , consumption (sociology) , causality (physics) , economics , energy consumption , econometrics , engineering , physics , social science , quantum mechanics , sociology , electrical engineering
Abstract This study estimates the causality relationship between electricity consumption and economic growth by M arkov S witching VAR ( MS‐VAR ) method for some emerging countries: A rgentina, C hina, I ndia, B razil, M exico, T urkey and S outh A frica. Knowledge of the direction of causality between electricity consumption and economic growth is of primary importance if appropriate energy policies and energy conservation measures are to be devised. The results from MS‐VAR models show that in first, second and third regime, electricity consumption is the G ranger cause of the economic growth and economic growth is the G ranger cause of the electricity consumption. In sum, we found some evidence of bidirectional G ranger causality between the electricity consumption and the economic growth.