Temporal causality between energy consumption and income in six Asian emerging countries

Article


Rafiq, Shuddhasattwa and Salim, Ruhul A.. 2009. "Temporal causality between energy consumption and income in six Asian emerging countries." Applied Economics Quarterly. 55 (4), pp. 335-350.
Article Title

Temporal causality between energy consumption and income in six Asian emerging countries

ERA Journal ID18498
Article CategoryArticle
AuthorsRafiq, Shuddhasattwa (Author) and Salim, Ruhul A. (Author)
Journal TitleApplied Economics Quarterly
Journal Citation55 (4), pp. 335-350
Number of Pages16
Year2009
Place of PublicationBerlin, Germany
ISSN1611-6607
1865-5122
Web Address (URL)http://aeq.diw.de/aeq/
Abstract

This article examines the short- and long-run causal relationship between energy consumption and GDP of six emerging economies of Asia. Based on cointegration and vector error correction modeling the empirical results show that there exists a unidirectional short- and long-run causality running from energy consumption to GDP for China, a unidirectional short-run causality from output to energy consumption for India, whilst a bi-directional short-run causality for Thailand. Neutrality between energy consumption and income is found for Indonesia, Malaysia and Philippines. Following causality results India may contribute to the fight against global warming directly implementing energy conservation measures. For China, where causality runs from energy consumption to output, the country should focus on technological developments and mitigation policies. Since a bi-directional causality is found in Thailand, a balanced combination of alternative policies seems to be appropriate. Nevertheless, all the countries may initiate environmental policies aimed at decreasing energy intensity, increasing energy efficiency, developing a market for emission trading.

Keywordsenergy conservation; cointegration; error correction model; generalized variance decompositions; generalized impulse response functions
ANZSRC Field of Research 2020380105. Environment and resource economics
440805. Environmental politics
389902. Ecological economics
Public Notes

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

Byline AffiliationsAustralian Centre for Sustainable Business and Development
Curtin University of Technology
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