Causality and dynamics of energy consumption and output: evidence from non-OECD Asian countries

Article


Salim, Ruhul A., Rafiq, Shuddhasattwa and Hassan, A.F.M. Kamrul. 2008. "Causality and dynamics of energy consumption and output: evidence from non-OECD Asian countries." Journal of Economic Development. 33 (2), pp. 1-26.
Article Title

Causality and dynamics of energy consumption and output: evidence from non-OECD Asian countries

ERA Journal ID18409
Article CategoryArticle
AuthorsSalim, Ruhul A. (Author), Rafiq, Shuddhasattwa (Author) and Hassan, A.F.M. Kamrul (Author)
Journal TitleJournal of Economic Development
Journal Citation33 (2), pp. 1-26
Number of Pages26
Year2008
Place of PublicationSeoul, Korea
ISSN0254-8372
Web Address (URL)http://jed.econ.cau.ac.kr
Abstract

This article examines the short-run and long-run causal relationship between energy consumption and output in six non-OECD Asian developing countries. Standard time series econometrics is used for this purpose. Based on cointegration and vector error correction modeling, the empirical result shows a bi-directional causality between energy consumption and income in Malaysia, while a unidirectional causality from output to energy consumption in China and Thailand and energy consumption to output in India and Pakistan. Bangladesh remains as an energy neutral economy confirming the fact that it is one of the lowest energy consuming countries in Asia. Both the generalized variance decompositions and the impulse response functions confirm the direction of causality in these countries. These findings have important policy implications for concerned countries. Countries like China and Thailand may contribute to the fight against global warming directly implementing energy conservation measures whereas India and Pakistan may focus on technological developments and mitigation policies. For Malaysia, a balanced combination of alternative policies seems to be appropriate.

Keywordsenergy conservation; cointegration; error correction model; generalized variance decompositions; generalized impulse response functions
ANZSRC Field of Research 2020440499. Development studies not elsewhere classified
359999. Other commerce, management, tourism and services not elsewhere classified
389902. Ecological economics
Public Notes

This article can be viewed upon request from Shuddhasattwa.Rafiq@usq.edu.au

Byline AffiliationsCurtin University of Technology
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