Energy Consumption- Growth Nexus in SAARC Countries: Using Cointegration and Error Correction Model

Rudra Prakash Prakash Pradhan

Abstract


The paper explores the nexus between energy consumption (oil and electricity) and economic growth in the five SAARC countries over the period 1970-2006. Using cointegration and Error Correction Model (ECM), the paper finds a unidirectional short run and long run causality from oil consumption to economic growth in Bangladesh and Nepal, a unidirectional short run and long run causality from electricity consumption to economic growth in Pakistan and Sri Lanka, a unidirectional short run and long run causality from economic growth to oil consumption in India and Sri Lanka, and a unidirectional causality from economic growth to electricity consumption in India and Nepal. It also finds the bidirectional causality between electricity consumption and economic growth in Bangladesh and between oil consumption and economic growth in Pakistan. The paper at the end suggests that energy and environmental policies should recognize the differences in the energy consumption-growth nexus in order to maintain sustainable economic growth in the region.


Full Text: PDF

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

Modern Applied Science   ISSN 1913-1844 (Print)   ISSN 1913-1852 (Online)

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.