Short- and long-run relationships between natural gas consumption and economic growth: Evidence from Pakistan

This paper examines the dynamic relationship between natural gas consumption and economic growth in Pakistan using a multivariate model by including capital and labor as control variables for the period between 1972QI and 2011QIV. The results of the ARDL bound testing indicate the presence of cointegration relationships among the variables. The estimated long-run impact of gas consumption on economic growth is greater than other factor inputs suggesting that energy is a critical driver of production and growth in Pakistan. Furthermore, the results of causality test suggest that natural gas consumption and economic growth are complements. Given that natural gas constitutes to the primary source of energy in Pakistan, the implication of this study is that natural gas conservation policies could harm growth and, therefore, requires the policy makers to improve the energy supply efficiency as well as formulate appropriate policies to attract investment and establish public–private partnership initiatives.     

Dynamics between energy,output, openness and financial development in sub-Saharan African countries

This study aims to establish the connection between energy use, economic output, financial development and trade, based on the panel data of 15 sub-Saharan African (SSA) countries during the period from 1983 to 2010. One full main panel and two subpanels were created by incorporating low-income and middle-income countries. The panel cointegration test results indicate a long-run relationship between the variables. The mean group (MG) estimators show that energy consumption, financial development, capital and international trade have significant impacts on economic output. In the case of middle-income countries, the Granger causality analysis reveals that rising economic output leads to higher energy consumption, but this is not true vice versa. This means that energy conservation measures are unlikely to have adverse impacts upon economic output. On the other hand, there is a complementary relationship between financial development and energy consumption. In this case, energy conservation measures should be critically analysed and implemented, so as not to have an unfavourable impact on financial development. In regard to low-income economies, there is no relationship between energy use and any of the other variables mentioned. Thus, a reduction in energy consumption has little or no significant impact on output, financial development, capital and trade.     

CO2 emissions,economic growth,energy consumption,trade and urbanization in new EU member and candidate countries: A panel data analysis

This paper investigates the causal relationship between energy consumption, carbon dioxide emissions, economic growth, trade openness and urbanization for a panel of new EU member and candidate countries over the period 1992–2010. Panel unit root tests, panel cointegration methods and panel causality tests are used to investigate this relationship. The main results provide evidence supporting the Environmental Kuznets Curve hypothesis. Hence, there is an inverted U-shaped relationship between environment and income for the sampled countries. The results also indicate that there is a short-run unidirectional panel causality running from energy consumption, trade openness and urbanization to carbon emissions, from GDP to energy consumption, from GDP, energy consumption and urbanization to trade openness, from urbanization to GDP, and from urbanization to trade openness. As for the long-run causal relationship, the results indicate that estimated coefficients of lagged error correction term in the carbon dioxide emissions, energy consumption, GDP, and trade openness equations are statistically significant, implying that these four variables could play an important role in adjustment process as the system departs from the long-run equilibrium.     

Do oil consumption and economic growth intensify environmental degradation? Evidence from developing economies

The purpose of this article is to empirically investigate the impact of economic growth, oil consumption, financial development, industrialization and trade openness on carbon dioxide (CO₂) emissions, particularly in relation to major oil-consuming developing economies. This study utilizes annual data from 1980 to 2012 on a panel of 18 developing countries. Our empirical analysis employs robust panel cointegration tests and a vector error correction model (VECM) framework. The empirical results of three panel cointegration models suggest that there is a significant long-run equilibrium relationship among economic growth, oil consumption, financial development, industrialization, trade openness and CO₂ emissions. Similarly, results from VECMs show that economic growth, oil consumption and industrialization have a short-run dynamic bidirectional feedback relationship with CO₂ emissions. Long-run (error-correction term) bidirectional causalities are found among CO₂ emissions, economic growth, oil consumption, financial development and trade openness. Our results confirm that economic growth and oil consumption have a significant impact on the CO₂ emissions in developing economies. Hence, the findings of this study have important policy implications for mitigating CO₂ emissions and offering sustainable economic development.     

The causal relationship between natural gas consumption and economic growth: evidence from the G7 countries

This article re-examines the nature of the causality between natural gas consumption and economic growth in G7 countries over the period from 1965 to 2011. We employ the Granger causality procedure proposed by Emirmahmutoglu and Kose (2011) which takes into account cross-sectional dependency and heterogeneity across countries. Our overall empirical results support the neutrality hypothesis for the panel while the individual country results confirm the same result with the exception of the case of UK, where the conservation hypothesis is confirmed, showing that GDP causes natural gas consumption in the country. These results make policies that promote the consumption of natural gas risk-free with regard to their effects to the economic growth and development levels.     

The energy-GDP nexus: Evidence from a panel of Pacific Island countries

The Pacific Island countries are small island economies that are increasingly dependent on energy for growth and development, yet highly susceptible to climate change. Thus, the relationship between energy consumption and GDP is crucial for realizing their future development and growth objectives. This article tests for Granger causality and provides long-run structural estimates for the relationship between energy consumption, GDP and urbanization for a panel of Pacific Island countries. For the panel as a whole in the long-run there is bidirectional Granger causality between energy consumption and GDP and these variables exert a positive impact on each other. A 1% increase in energy consumption increases GDP by 0.11%, while a 1% increase in GDP increases energy consumption by 0.23%. The findings suggest that for the panel as a whole these countries should increase investment in energy infrastructure and regulatory reform of energy infrastructure to improve delivery efficiency, continue to promote alternative energy sources and put in place energy conservation policies to reduce unnecessary wastage. These strategies seek to realize the dual objectives of reducing the adverse effects of energy use on the environment, while avoiding the negative effect on economic growth of reducing energy consumption.     

Energy consumption and economic growth in Asian economies: A more comprehensive analysis using panel data

This paper applies the most recently developed panel unit root, heterogeneous panel cointegration and panel-based error correction models to re-investigate co-movement and the causal relationship between energy consumption and real GDP within a multivariate framework that includes capital stock and labor input for 16 Asian countries during the 1971–2002 period. It employs the production side model (aggregate production function). The empirical results fully support a positive long-run cointegrated relationship between real GDP and energy consumption when the heterogeneous country effect is taken into account. It is found that although economic growth and energy consumption lack short-run causality, there is long-run unidirectional causality running from energy consumption to economic growth. This means that reducing energy consumption does not adversely affect GDP in the short-run but would in the long-run; thus, these countries should adopt a more vigorous energy policy. Furthermore, we broaden the investigation by dividing the sample countries into two cross-regional groups, namely the APEC and ASEAN groups, and even more important results and implications emerge.     

The energy consumption-real GDP nexus revisited: Empirical evidence from 93 countries

In this paper, we analyse the long-run relationship between energy consumption and real GDP for 93 countries. We find mixed results on the impact of energy consumption on real GDP, with greater evidence at the country level supporting energy consumption having a negative causal effect on real GDP. For the G6 panel of countries, we find significant evidence that energy consumption negatively Granger causes real GDP. This means that for countries where energy consumption has a negative long-run causal effect on real GDP, energy conversation policies should not retard economic growth. We identify these countries and regional panels. We argue that these countries/regions should play a greater role in reducing carbon dioxide emissions.     

International Productivity Differences and the Roles of Domestic Investment,FDI and Trade

This paper calculates Theil's entropy index to measure the extent of productivity differences across 92 countries for the period from 1970 to 2003. While there is evidence of increasing differences in productivity across these countries, we observe different patterns when we group the countries by income levels. These differences seem to be decreasing among middle income developing and developed countries, whereas they seem to be widening among low and high income developing countries. The results of our multivariate time series analysis also suggest that FDI increases productivity differences among low and high income developing countries, whereas GDI reduces these differences among low income countries in the long-run. Granger causality test results indicate that while an increase in GDI leads to a decline in growth of trade, a higher growth of trade appears to be important for attracting FDI to middle income countries. Furthermore, a reduction in productivity differences and a higher FDI growth lead to higher growth of trade in developed countries.     

Does urbanization increase pollutant emission and energy intensity? evidence from some Asian developing economies

This paper aims to investigate the effects of urbanization on pollutant emissions and energy intensity in selected Asian developing countries after controlling for the effects of disaggregated (renewable and non-renewable) energy consumption, trade liberalization, and economic growth. We use both linear and nonlinear panel data econometric techniques and employ recently introduced mean group estimation methods, allowing for heterogeneity and cross-sectional dependence. However, to check the robustness of our panel results, we also apply the autoregressive distributed lag (ARDL)-bound testing approach to country-level data. In addition, the relationship between affluence and CO₂ emissions is examined in the context of the Environmental Kuznets Curve (EKC) hypothesis. The estimation results identify the population, affluence, and non-renewable energy consumption as major factors in pollutant emissions in Asian countries. However, the results of the EKC hypothesis show that when countries achieve a certain level of economic growth, their emissions tend to decline. Whereas nonlinear results show that renewable energy, urbanization, and trade liberalization reduce emissions, linear estimations do not confirm these outcomes. Thus, substitution of non-renewable for renewable energy consumption, cautious and planned urbanization programs and more liberal trading regimes may be viable options for sustainable growth of these developing Asian economies.     

Correlates of economic growth in developing countries: a panel cointegration approach

The inflow of foreign direct investment (FDI) has been found to play a crucial role in the economic growth of receiving countries. Using panel cointegration techniques, this perception was found to be mitigated by an empirical approach that yields different results from previous studies. While the growth in real FDI has an influence on real GDP growth across developing countries in the short-run, year-to-year periods, it does not explain real GDP in the long-run. Rather, it appears to be the economic factors internal to a country that have the most influence on real GDP over time: human capital (measured by literacy rates), export trade, and monetary and fiscal policy.     

Predictability within the energy consumption–economic growth nexus: Some evidence from income and regional groups

In re-examining the nexus between energy consumption and economic growth through the predictability framework, we adopt a panel data predictive regression model to examine the possibility of growth, conservative, feedback, or neutrality hypotheses for 135 countries. A predictive regression model is fitted to panels of countries on the basis of location and level of economic development. Findings suggest strong support for the neutrality hypothesis. A developing economy panel (90 countries) favours the conservative hypothesis, although a panel of 32 lower middle-income countries suggests that energy consumption per capita predicts real GDP per capita. These forecasts could provide future policy directions.     

How strong is the causal relationship between globalization and energy consumption in developed economies? A country-specific time-series and panel analysis

We examine the causal relationship between globalization, economic growth and energy consumption for 25 developed economies using both time series and panel data techniques for the period 1970–2014. Due to the presence of cross-sectional dependence in the panel (countries from Asia, North America, Western Europe and Oceania), we employ the cross-sectional augmented IPS test to ascertain unit root properties. The cointegration test results indicate the presence of a long-run association between globalization, economic growth and energy consumption. Long-run heterogeneous panel elasticities are estimated through the common correlated effects mean group estimator and the augmented mean group estimator. The empirical results reveal that, for most countries, globalization increases energy consumption. In the USA and UK, globalization is negatively correlated with energy consumption. The causality analysis indicates the presence of the globalization-driven energy consumption hypothesis. This empirical analysis suggests insightful policy guidelines for policy makers using globalization as an economic tool to utilize energy efficiently for sustainable economic development in the long run.     

Is there an export or import-led productivity growth in rapidly developing Asian countries? a multivariate VAR analysis

In contrast to cross-country studies, the paper investigates the relationships between trade and labour productivity for nine rapidly developing Asian countries in a time-series framework using a vector error-correction model. Independent tests on the long-run and short-run relationship between trade variables of exports and imports and productivity are conducted. The results suggest that trade has an important impact on productivity and output growth in the economy, however it is imports that provide the important?‘virtuous’?link between trade and output growth. The results indicate that exports and imports have qualitatively different impacts on labour productivity. The long-run result shows that there is no causal effect from exports to labour productivity growth for Hong Kong, Indonesia, Japan, Taiwan and Thailand; thereby suggesting that there is no export-led productivity growth in these countries. However, significant causal effects were found from imports to productivity growth, suggesting import-led productivity growth in India, Indonesia, Malaysia, Philippines, Singapore and Taiwan. In addition, the results indicate that imports tend to have greater positive impact on productivity growth in the long run.     

Liquidity Constraints and Business Cycles in Developing Economies

Open economy extensions of real business cycle models, even if generally successful, have met some difficulties replicating a few important stylized facts. In particular, these models tend to predict excessive consumption smoothing and consumption correlations across countries. The observed negative correlation between the trade balance and output in developing countries, the variability of the trade balance and its correlation with the terms of trade have also proven difficult to reproduce. This paper considers how introduction of incomplete markets in the form of liquidity constraints can alleviate these problems. This analysis suggests that adding liquidity constraints helps predict the variability of consumption relative to output. It also improves our estimate of the correlation between the trade balance and output. The model correctly replicates the small positive correlation between the terms of trade and the trade balance. However, it slightly underpredicts the variability of the trade balance when 50% of the consumers are assumed to be liquidity constrained.Journal of Economic LiteratureClassification Numbers: E13, E32, E44.     

Long-run impacts of inflation across sectors in a small sample of countries

This article investigates the long-run effects of inflation on economic output for 10 sectors of the economy, with a sample of 7 countries. The analysis is done using long-run restrictions in a vector autoregression and reports long-run multipliers with bootstrapped confidence bands. The results suggest that some sectors seem to be affected differently than others, as well as significant heterogeneity across countries. The results suggest the strongest effects in the low inflation countries Germany and Japan as has been found in similar studies. In contrast to research using growth regressions, the evidence suggests a positive long-run effect of inflation on output.     

Natural gas prices and stock prices: Evidence from EU-15 countries

This study investigates the long-run relationship between natural gas prices and stock prices by using the Johansen and Juselius cointegration test and error–correction based Granger causality models for the EU-15 countries. We employ quarterly data covering the period from 1990:1 to 2008:1. Empirical findings suggest that there is a unique long-term equilibrium relationship between natural gas prices, industrial production and stock prices in Austria, Denmark, Finland, Germany and Luxembourg. However, no relationship is found between these variables in the other ten EU-15 countries. Although we detect a significant long-run relationship between stock prices and natural gas prices, Granger causality test results imply an indirect Granger causal relationship between these two variables. In addition, we investigate the Granger causal relationship between stock returns, industrial production growth and natural gas price increase for Austria, Denmark, Finland, Germany and Luxembourg. As a result, increase in natural gas prices seem to impact industrial production growth at the first place. In turn, industrial production growth appears to affect stock returns.     

Country Size and Economic Fluctuations

This paper investigates the character of business cycles across large and small economies. Empirically, G-7 countries have less volatile investment, consumption, and trade balance ratios, higher correlations between domestic sacing and investment rates, and about the same correlation of the trade-balance ratio and investment ratio as 68 smaller countries. These observations are consistent with a standard one-sector two-country general equilibrium model in which the only source of heterogeneity is country size. Since many developing countries are small, these findings suggest that even absent differences in markets and instutitions, economic fluctuations would be more severe in developing countries.     

能源消费、经济资本化与节能减排

本文借助面板协整技术考察能源消费与中国经济增长的关系,基于经济资本化视角经验分析中国节能减排战略的现实选择.研究结果显示:(1)能源消费与经济增长存在长期稳定关系,无论长期还是短期,“能源中性”假说均不成立;(2)地区间能源产出弹性差异较大,各地区适宜制定差别化的节能减排目标;(3)为增长而挖掘和重估各项资源经济价值的经济资本化模式不利于节能减排战略的实施.     

CO2 emissions in Australia: economic and non-economic drivers in the long-run

Australia has sustained a relatively high economic growth rate since the 1980s compared to other developed countries. Per capita CO₂ emissions tend to be highest amongst OECD countries, creating new challenges to cut back emissions towards international standards. This research explores the long-run dynamics of CO₂ emissions, economic and population growth along with the effects of globalization tested as contributing factors. We find economic growth is not emission-intensive in Australia, while energy consumption is emissions intensive. Second, in an environment of increasing population, our findings suggest Australia needs to be energy efficient at the household level, creating appropriate infrastructure for sustainable population growth. High population growth and open migration policy can be detrimental in reducing CO₂ emissions. Finally, we establish globalized environment has been conducive in combating emissions. In this respect, we establish the beneficial effect of economic globalization compared to social and political dimensions of globalization in curbing emissions.