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The electricity consumption, employment and growth nexus: evidence from L ebanon
Author(s) -
Fakih Ali,
Marrouch Walid
Publication year - 2015
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12053
Subject(s) - nexus (standard) , electricity , economics , consumption (sociology) , production (economics) , production function , short run , causality (physics) , product (mathematics) , function (biology) , aggregate (composite) , labour economics , econometrics , macroeconomics , engineering , mathematics , social science , physics , geometry , electrical engineering , materials science , quantum mechanics , sociology , composite material , embedded system , evolutionary biology , biology
The causal relationship between electricity consumption and growth in L ebanon is examined using aggregate employment in a trivariate setting for the period 1980–2011. We test the main hypothesis that electricity is an input in the aggregate production function. Our results reject the input hypothesis in L ebanon in both the short run and long run. However, electricity is found to be a by‐product only when we employ a stronger test for G ranger causality. These results seem to suggest that electricity conservation strategies should be easier to implement without additional sacrifices to growth in L ebanon. By contrast, we find evidence of a long‐run relationship between employment and growth. We offer some specific detailed strategy to L ebanon that provides support for carrying out policies that increase the level of labour‐promoting investments in the country.