scholarly journals Revisiting Energy Consumption-economic Growth Hypothesis: Do Slope Heterogeneity and Cross-sectional Dependence Matter?

2021 ◽  
Vol 8 (1) ◽  
pp. 10-24
Author(s):  
Miriam Kamah ◽  
Joshua Sunday Riti
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Panel Data ◽  
Developed Countries ◽  
Cross Sectional ◽  
Distributed Lag ◽  
Long Run ◽  
Advanced Economies ◽  
Cross Sectional Dependence

In this paper, the long-term nexus between energy consumption and economic growth is investigated using a panel data of 80 countries from World Bank data base for the period 1970 to 2017. In order to check for the issues of endogeneity, slope heterogeneity, and cross-sectional dependence present in errors of panel data, the study applied cross-sectional augmented autoregressive distributed lag (CS-ARDL) and cross-sectional augmented distributed lag (CS-DL) models to examine the long-term impact of energy consumption on economic growth. The empirical results revealed that energy consumption has a positive and significant long-run effect on economic growth and that cross-sectional dependence, slope endogeneity and heterogeneity are issues that should be on the watch when dealing with panel data of developing and developed countries’ analysis. Furthermore, the outcomes indicated that the impact of energy consumption on economic growth is stronger in less developed countries than in advanced economies. Technological progressions that give rise to the advancement of clean and efficient energy and substitution of low-quality fuels with high quality fuels are some of the possible channels that weaken the link between energy consumption and economic growth in advanced economies. Importantly, from a policy perspective, based on the study findings, energy conservation policies aimed at promoting environmental quality may worsen economic growth in developing countries, thereby adversely affecting their long-run economic growths.

scholarly journals Wind Energy And CO2 Emissions: AMG Estimations For Selected Countries

2021 ◽  
Author(s):  
Taner Güney ◽  
Emrah Üstündağ
Keyword(s):  
Energy Consumption ◽  
Wind Energy ◽  
Carbon Emissions ◽  
Cross Sectional ◽  
Long Run ◽  
Negative Effect ◽  
Cross Sectional Dependence ◽  
The Relationship ◽  
Positive Effect

Abstract This study aims to analyze the relationship between wind energy consumption, coal energy consumption, globalization, economic growth and carbon emissions in a selected country group. This analysis was made with the data of 37 countries for the period 2000-2019. In order to examine the long-term relationship between the variables, the AMG method, which makes an estimation by considering the cross-sectional dependence and slope homogeneity, was used in the study. According to the long-term coefficient estimates of the cointegrated variables, wind energy consumption has a statistically significant and negative effect on carbon emissions in the long run. A 1% increase in wind energy consumption reduces carbon emissions by 0.018%. On the other hand, the globalization variable has a statistically significant and positive effect on carbon emissions in the long run. A 1% increase in globalization increases carbon emissions by 0.107%. These findings show the importance of wind energy consumption in reducing carbon emissions. For this reason, policies should be produced to increase wind energy consumption globally and necessary incentives should be provided.

PENGARUH INFRASTRUKTUR SECARA SPASIAL TERHADAP KONVERGENSI PERTUMBUHAN EKONOMI DI INDONESIA

INFO ARTHA ◽  
2017 ◽  
Vol 1 ◽  
pp. 17-28
Author(s):  
Anisa Fahmi
Keyword(s):  
Economic Growth ◽  
Regional Economics ◽  
Developed Countries ◽  
Road Infrastructure ◽  
Long Run ◽  
Catch Up ◽  
The Developed Countries ◽  
Positive Effect ◽  
Neoclassical Growth Theory

Motivated by inter-regional disparities condition that occurs persistently, this study examines the Indonesian economy in the long run in order to know whether it tends to converge or diverge. This convergence is based on the Solow Neoclassical growth theory assuming the existence of diminishing returns to capital so that when the developed countries reach steady state conditions, developing countries will continuously grow up to 'catch-up' with developed countries. Based on regional economics perspective, each region can not be treated as a stand-alone unit,therefore, this study also focuses on the influence of spatial dependency and infrastructure. Economical and political situations of a region will influence policy in that region which will also have an impact to the neighboring regions. The estimation results of spatial cross-regressive model using fixed effect method consistently confirmed that the Indonesian economy in the long term will likely converge with a speed of 8.08 percent per year. Other findings are road infrastructure has a positive effect on economic growth and investment and road infrastructure are spatially showed a positive effect on economic growth. In other words, the investment and infrastructure of a region does not only affect the economic growth of that region but also to the economy of the contiguous regions. 

scholarly journals The Impact of Industrialization, Trade Openness, Financial Development, and Energy Consumption on Economic Growth in Indonesia

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 174
Author(s):  
Khalid Eltayeb Elfaki ◽  
Rossanto Dwi Handoyo ◽  
Kabiru Hannafi Ibrahim
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Least Squares ◽  
Financial Development ◽  
Correction Term ◽  
Trade Openness ◽  
Ordinary Least Squares ◽  
Distributed Lag ◽  
Long Run ◽  
The Impact

This study aimed to scrutinize the impact of financial development, energy consumption, industrialization, and trade openness on economic growth in Indonesia over the period 1984–2018. To do so, the study employed the autoregressive distributed lag (ARDL) model to estimate the long-run and short-run nexus among the variables. Furthermore, fully modified ordinary least squares (FMOLS), dynamic least squares (DOLS), and canonical cointegrating regression (CCR) were used for a more robust examination of the empirical findings. The result of cointegration confirms the presence of cointegration among the variables. Findings from the ARDL indicate that industrialization, energy consumption, and financial development (measured by domestic credit) positively influence economic growth in the long run. However, financial development (measured by money supply) and trade openness demonstrate a negative effect on economic growth. The positive nexus among industrialization, financial development, energy consumption, and economic growth explains that these variables were stimulating growth in Indonesia. The error correction term indicates a 68% annual adjustment from any deviation in the previous period’s long-run equilibrium economic growth. These findings provide a strong testimony that industrialization and financial development are key to sustained long-run economic growth in Indonesia.

Economic globalization and energy consumption patterns in Organisation for Economic Co-operation and Development economies

2021 ◽  
pp. 0958305X2110425
Author(s):  
Hemachandra Padhan ◽  
Santosh Kumar Sahu ◽  
Umakant Dash
Keyword(s):  
Energy Consumption ◽  
Economic Globalization ◽  
Consumption Patterns ◽  
Coal Consumption ◽  
Cross Sectional ◽  
Important Indicator ◽  
Distributed Lag ◽  
Long Run ◽  
Energy Consumption Patterns ◽  
The Impact

This study examines the impact of economic globalization on the patterns of energy consumption for 24 Organisation for Economic Co-operation and Development (OECD) economies from 1995 to 2015. We employ Westerlund cointegration, which shows a long-run association between economic globalization and energy consumption patterns. Furthermore, cross-sectional autoregressive distributed lag models (CS-ARDL) results explain the short-run and long-run relationship between the series. The results further explain that economic globalization reduces oil and coal consumption while accelerating gas consumption in OECD economies. We additionally employ the Eberhardt augmented mean group test to verify consistency with CS-ARDL results. The empirical evidence of this study suggests that OECD economies’ policymakers should prioritize economic globalization in framing policies related to energy consumption. Furthermore, allocating funds for better technology related to high polluting fuels should be one of the crucial considerations arising from this study. Finally, we recommend economic globalization as an important indicator to address the issues related to OECD economics’ environmental and ecological footprints.

Nexus between Openness to Trade and Economic Growth: An Empirical Investigation of Afghanistan

2019 ◽  
Vol 20 (2) ◽  
pp. 205-223
Author(s):  
Nassir Ul Haq Wani
Keyword(s):  
Economic Growth ◽  
Trade Openness ◽  
Decomposition Analysis ◽  
Developed Countries ◽  
Least Square ◽  
Capital Goods ◽  
Promotion Strategy ◽  
Distributed Lag ◽  
Long Run ◽  
Volume Of Trade

The notion that the international trade is the foundation of economic growth dates long back, and even now, an irresistible body of literature confirms a strong and positive link between trade openness and economic growth. However, most of these studies are focused on developed countries. Indeed literature from developing countries are scant, those from under developed and a landlocked country like Afghanistan are almost non-existent. This article endeavours to innovatively scrutinize the relationship between trade liberalization and economic growth in Afghanistan, using biannual data for the period 1995–2016 and thus evaluates the comparative effect of three different measures of trade openness on the economic growth by using more rigorous econometric techniques. Autoregressive distributed lag (ARDL) method, JJ CO-integration and ordinary least square (OLS) results suggest significant positive long-run relationship between export and economic growth. In contrast, total volume of trade and imports have significant negative effect on the economic growth. The addition of variables and results of fully modified OLS suggest that the results are robust. The Granger causality and variance decomposition analysis indicate the unidirectional causality between trade openness and economic growth. In export model, causality runs from export to growth. Whereas, in the model with total volume of trade and import, causality runs from growth to total volume of trade and imports in Afghanistan. From the findings, it is concluded that the policymakers should focus on export promotion strategy to enhance the economic growth in Afghanistan. Besides, efficient utilization of capital goods should be ensured and reliance on non-capital goods should be less in order to ensure high domestic production in the country. JEL: F10, F43, C22

scholarly journals Nexus Between Carbon Emissions, Energy Consumption, Urbanization and Economic Growth in Asia: Evidence From Common Correlated Effects Mean Group Estimator (CCEMG)

2021 ◽  
Vol 8 ◽  
Author(s):  
Yusuf Babatunde Adeneye ◽  
Amar Hisham Jaaffar ◽  
Chai Aun Ooi ◽  
Say Keat Ooi
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emission ◽  
Panel Cointegration ◽  
Energy Prices ◽  
Asian Countries ◽  
Cross Sectional ◽  
Long Run ◽  
Cointegration Tests ◽  
Common Correlated Effects

This study investigates the dynamic relationships between carbon emission, urbanization, energy consumption, and economic growth in a panel of 42 Asian countries for the period 2000–2014 using dynamic common correlated effects panel data modeling. This study employs second generation cross-sectional Pesaran (J. Appl. Econom., 2007, 22(2), 265-312) panel unit root, Westerlund panel cointegration tests (Econom. Stat., 2007, 69(6), 709-748), and Pesaran’s (Econometrica, 2006, 74(4), 967-1012) common correlated effects mean group estimation technique. These approaches allow for cross-sectional dependence, and are robust to the presence of common factors, serial correlation, and slope heterogeneity. The Common Correlated Effect Mean Group test reveals a high average coefficient of 0.602 between carbon emission and energy consumption while low coefficients of 0.114 and 0.184 for the pairs of carbon emission-urbanization and carbon emission-GDP, respectively for the panel as a whole, suggesting a cointegration between carbon emission, urbanization, energy consumption, and economic growth. The results indicate that there is relatively high carbon emission especially for highly populated and geopolitical risk Asian countries in the short run. Findings reveal long run relationships between the variables, which is attributed to the on-going carbon taxation and energy prices. Our results are robust to PMG-ARDL estimator. Overall, these findings cast important implications on renewable energy policy and urban planning insights for the policymakers.

scholarly journals Revisiting the debt-growth nexus: Evidence from India

2021 ◽  
Vol 66 (231) ◽  
pp. 151-171
Author(s):  
Pratibha Saini ◽  
Krishna Muniyoor
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Negative Relationship ◽  
Sustainable Growth ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Significant Negative Relationship ◽  
Primary Surplus

The main purpose of this study is to examine the debt-growth nexus in India over the period 1984-2019 using Bayer-Hanck and Autoregressive Distributed Lag (ARDL) cointegration techniques. The findings of both techniques suggest the existence of a negative relationship between public debt and economic growth in the long run. The results also confirm the significant negative relationship between foreign exchange reserves and economic growth. Interestingly, the test results confirm the unidirectional causality running from public debt to economic growth in the case of India. From a policy perspective, reducing public debt is imperative to achieve long-term sustainable growth. Efforts should be made to circumvent the burden of burgeoning interest liabilities by generating a primary surplus, which will facilitate debt servicing and timely repayment of debt.

Carbon emissions, economic growth and trade: Empirical evidence from trading nations

2021 ◽  
Vol 20 (1) ◽  
pp. 61-78 ◽  
Author(s):  
Areej Aftab Siddiqui ◽  
Silky Vigg Kushwah
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Carbon Emissions ◽  
Empirical Relationship ◽  
Clean Energy ◽  
Developed Countries ◽  
Incentive Structure ◽  
Newly Industrialized Countries ◽  
Country Level ◽  
Long Run

The article aims to develop an integrated relationship between carbon emissions, energy consumption, economic growth and trade for the top ten trading countries in the world for a period of nineteen years, 2000–2018. The results of panel data indicate a significant relationship between carbon emissions, energy consumption, economic growth and trade both in the short and long run. It is seen that a bidirectional causality between carbon emissions, trade and growth is present. Empirical results of the analysis in this article indicate that an increase in carbon emissions leads to an increase in the economic growth rate. The article also finds a positive relationship between carbon emissions and energy consumption. The findings also show that the emerging and newly industrialized countries place more emphasis on enhancing their trade positions, while developed countries tend to focus more on the overall economic growth than on trade. A major limitation of the study is that the data for energy consumption and carbon emissions is for the economy as a whole and not only for manufacturing. An incentive structure for reducing carbon emissions for the selected countries can be adopted along with the focus on adopting clean energy. The article’s findings add to the existing literature as comparatively few studies have been conducted with trade as an indicator and at the cross-country level for determining the empirical relationship between energy consumption, carbon emissions, growth and trade.

Oil, Volatility, and Institutions

2019 ◽  
pp. 52-72
Author(s):  
Amany El-Anshasy ◽  
Kamiar Mohaddes ◽  
Jeffrey B. Nugent
Keyword(s):  
Economic Growth ◽  
Resource Curse ◽  
Output Growth ◽  
Negative Effects ◽  
Cross Sectional ◽  
Distributed Lag ◽  
Oil Revenue ◽  
Long Run ◽  
Negative Effect ◽  
Revenue Volatility

This chapter examines the long-run effects of oil revenue and its volatility on economic growth, as well as the role of institutions in this relationship. We collect annual and monthly data on 17 major oil producers between 1961 and 2013, and use the panel autoregressive distributed lag (ARDL) approach as well as its cross-sectionally augmented version (CS-ARDL) for estimation. Therefore, in contrast to earlier literature on the resource curse, we take into account all three key features of the panel: dynamics, heterogeneity, and cross-sectional dependence. The results suggest that: (i) oil revenue volatility has a significant negative effect on output growth; (ii) a higher growth rate of oil revenue significantly raises economic growth; and (iii) better fiscal policy can offset some of the negative effects of oil revenue volatility. We therefore argue that volatility in oil revenues combined with poor governmental responses to this volatility drives the resource curse paradox.

Nexus of Renewable Energy Consumption, Economic Growth, Population Growth, FDI, and Environmental Degradation in South Asian Countries: New Evidence from Driscoll-Kraay Standard Error Approach

2021 ◽  
Vol 3 (2) ◽  
pp. 200-211
Author(s):  
Ansar Abbas Shah ◽  
Muhammad Sajjad Hussain ◽  
Muhammad Atif Nawaz ◽  
Mazhar Iqbal
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Population Growth ◽  
South Asian ◽  
Environmental Degradation ◽  
Asian Countries ◽  
Renewable Energy Consumption ◽  
Cross Sectional ◽  
Cross Sectional Dependence

Environmental degradation is the most prominent area nowadays, especially in developing counties where high renewable energy consumption and population growth deteriorate the atmosphere of the country. Thus, the current study investigates the nexus among renewable energy consumption, economic growth (EG), population growth, foreign direct investment (FDI), and environmental degradation in South Asian countries. The covariance matrix estimators that are developed by “Driscoll and Kraay” are used in this study. The primary property of this estimator is that it does not account for the cross-sectional dependence; thus, it provides substantial, robust outcomes among the cross-sectional units while in the presence of cross-sectional dependence. The data was collected from the World Development Indicators (WDI) from 2001 to 2019. The findings exposed that positive nexus among the population growth, FDI, and environmental degradation while renewable energy consumption and EG has negative nexus with environmental degradation and also not supported the EKC hypothesis in South Asian countries. These findings suggested that the regulators should develop policies that reduce environmental degradation in the presence of high EG, energy consumption, FDI, and population growth.

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