Showing papers in "International Journal of Energy Economics and Policy in 2016"

The Dynamic Linkage between Technological Innovation and CO2 emissions in Malaysia: An ARDL Bound Approach

Abstract: Environmental degradation and climate change are the main challenges encountered to achieve the predominant objective of sustainable development. There has been voluminous work done in this area, but the policies adopted and the empirical relationship between the determinants of CO 2 emissions are not clear to handle the problem. There exists a theoretical and empirical contradiction in the literature on the relationship between the variables under the study. Thus, the current study investigates the relationship between carbon dioxide (CO 2 ) emissions and its determinants namely economic growth, energy consumption, financial development, and technological innovations for Malaysia between 1985 and 2012. To achieve the objective of long-run relationship the autoregressive distributed lagged (ARDL) model is used for parameter estimation. The empirical results reveal that technological innovation is having a negative but insignificant relationship with environmental pollution in Malaysia during the period under study. The study also indicates that higher economic growth improves the environmental quality in the long-run and is in line with the Environmental Kuznets Curve (EKC) hypothesis. In a similar vein, the results indicate that financial sector development will lessen the CO 2 emissions, thus, improving the quality of the environment in Malaysia. The short-run results reveal no evidence of the validation EKC hypothesis. Furthermore, the study applied Granger causality approach for causal relationship and found bidirectional causality running between economic growth and CO 2 emissions and between technological innovation and CO 2 emissions in the long-run. The study also found that the impact of energy consumption in the short-run is environmentally friendly. Moreover, the results indicate a short-run bidirectional causality running between energy consumption and economic growth and also between economic growth and technological innovation. Keywords: CO 2 emissions, EKC, technological innovation, ARDL, Malaysia JEL Classifications: C32, O52, Q43, Q50

Relationship between Economic Growth and Environmental Degradation: Is there Evidence of an Environmental Kuznets Curve for Brazil?

Abstract: This study investigates the relationship between CO 2 emissions, economic growth, energy use and electricity production by hydroelectric sources in Brazil. To verify the Environmental Kuznets Curve (EKC) hypothesis we use time-series data for the period 1971-2011. The Autoregressive Distributed Lag (ARDL) methodology was used to test for cointegration in the long run. Additionally, the VECM Granger causality test was applied to verify the predictive value of independent variables. Empirical results find that there is a quadratic long run relationship between CO 2 emissions and economic growth, confirming the existence of an EKC for Brazil. Furthermore, energy use shows increasing effects on emissions, while electricity production by hydropower sources has an inverse relationship with environmental degradation. The short run model does not provide evidence for the EKC theory. The differences between the results in the long and short run models can be considered for establishing environmental policies. This suggests that special attention to both variables -energy use and the electricity production by hydroelectric sources- could be an effective way to mitigate CO 2 emissions in Brazil. Keywords: Environmental Kuznets Curve, Energy, Hydroelectric Power, Brazil JEL Classifications: C32, O54, Q50, Q5

The Convergence Behavior of CO2 Emissions in Seven Regions under Multiple Structural Breaks

Abstract: The aim of this paper is to examine the convergence behavior of carbon dioxide emissions per capita (co) in seven regions for 1960-2011 period by using recently developed the second generation panel data methods. Empirical results are as follows: i) there exists cross-sectional dependency for co variable ii) the CADF unit root test without structural breaks shows that the co variable is stationary at its first differences, iii) but the PANKPSS unit root test with structural breaks the co variable is stationary at its level. The overall results indicate that the regional stochastic convergence of carbon emission per capita is valid for the seven regions under structural breaks and any environmental shock has temporary effect. Keywords: Carbon Emissions, Stochastic Convergence, Panel Data. JEL Classifications : C33, Q53, Q56

Revisiting the Electricity Consumption-Economic Growth Nexus in Angola: The Role of Exports, Imports and Urbanization

Abstract: The present study aims to reinvestigate the relationship between electricity consumption and economic growth in Angola by introducing exports, imports and urbanization in the production function. We utilize the combined cointegration method to test the long-run relationship for the period of 1971-2012. Whilst accommodating structural breaks, the ARDL bounds test approach is applied to examine the robustness of the long-run relationship in the variables. The results reveal that electricity consumption boosts economic growth but urbanization impairs it. The VECM causality results unveil the feedback relationship of electricity consumption with economic growth, exports and imports. It is, therefore, suggested that the policy makers should formulate the policies to improve the electricity supply that in turn will enhance the economic growth. Keywords: Electricity consumption, economic growth, combined cointegration test, Granger causality test JEL Classifications : C32; O55, Q43

Electricity Consumption and Information and Communication Technology (ICT) in the N-11 Emerging Economies

Abstract: In this study, the impact of information communication technologies (ICT) on electricity consumption in the Next 11 (N-11) emerging economies over the period 1990-2014 is examined. This period coincides with high economic growth rates in those countries and associated rapidly increasing electricity consumption as well as the ICT revolution that saw the rapid uptake of new ICT by its peoples. Little has been published on the relationship between ICT and electricity consumption in the N-11 emerging economies. This paper examines the hypothesis that increased use of ICT increases electricity consumption. Secondly, how different measures of ICT affect electricity consumption and finally, what are the short-run and long run elasticities of electricity demand with respect to ICT in N-11 countries? The methods used included dynamic panel data models (MG, PMG, system GMM) and show a positive and statistically significant relationship between ICT and electricity consumption where ICT is measured using internet connections, mobile phones or the import percentage of ICT goods of total imports. Long run ICT elasticities are smaller than income elasticities but because ICT growth rates are so much higher than economic growth rates, the impact of ICT on electricity consumption is greater than the impact of income on electricity consumption. Electricity demand projections in emerging economies, which do not include ICT as an explanatory variable, may underestimate actual electricity demand. This can lead to unplanned electricity shortages if actual electricity demand exceeds planned electricity demand. Thus, the paper gives policy recommendations based on the empirical results for the N-11 countries to address this problem.

Oil and food prices co-integration nexus for Indonesia: a non-linear autoregressive distributed lag analysis

Abstract: This paper examines the relationship between the prices of oil and food price for Indonesia using Nonlinear Autoregressive distributed lag (NARDL) method. The bound test for co-integration for the NARDL model shows the evidence of co-integration between food price, growth rate of GDP and oil price. The estimated NARDL for the oil price in domestic currency provides strong evidence of long and short run co-integration between food and oil price when the latter increases while the relations for oil price reduction is not present and insignificant. The estimators of positive change in oil price model measured in US Dollar are significant in our study. Keywords: Oil price, Food price, NARDL, Indonesia JEL Classifications: B4; E3

How Globalization and Economic Growth Affect Energy Consumption: Panel Data Analysis in the Sample of BRIC Countries

Abstract: This study analyzes the causality and cointegration correlation between the series using total energy consumption, economic growth, and globalization data of BRIC countries (Brazil, Russia, India, China) in 2000-2012 period. Unit roots of the series were extracted in empirical part in order to make them stationary. Then, Pedroni and Kao cointegration and Granger causality analysis panel were used. As a result of the cointegration analysis, it was observed that the series were cointegrated in the long term. On the other hand, causality analysis results suggested a unidirectional causality correlation from total energy consumption to economic growth, and another unidirectional causality correlation from globalization to economic growth. Lastly, no causality correlation between energy consumption and globalization was found. Keywords: Globalization, Economic Growth, Energy Consumption, BRIC. JEL Classifications: F60, O10, O13

Bounds Testing Approach to Analyze the Existence of an Environmental Kuznets Curve in Ecuador

Abstract: This paper provides empirical evidence of a long-run environmental Kuznets curve (EKC) for Ecuador from 1971 to 2011. Using the autoregressive distributed lag bounds testing approach, we do not just estimate the effect of economic growth on CO 2 emissions but also the effect of energy consumption on this one. The effects of all variables have the expected signs. In addition, we test for Granger causality among the variables using an error correction model. Only GDP granger causes energy consumption in the short-run. The results have several policy implications that are consistent with the recent environmental policy of the government. Keywords: EKC, Ecuador, Energy Matrix. JEL Classifications: C32, O52, Q43, Q50

Transparency in Nigeria’s Oil and Gas Industry: Is Policy Re-engineering the Way Out?

Abstract: Nigeria is Sub-Saharan Africa’s largest oil producer and also possesses huge unrealized gas deposits. The oil and gas industry is considered as the lifeblood of Nigeria’s socio-economic development, bearing in mind the well-established historical antecedents and the unfolding happenings. However, inspite of the strategic role of this industry to national wellbeing, it is a signpost for; corruption, infrastructure deficit, oil smuggling, vandalism and diverse security challenges. It is noteworthy, that accurate revenues attributable to the industry are not consistently published. Royalties paid to the Federal Government remain undisclosed for unjustifiable reasons. Also, specifics of transactions are disguised, thereby making it practically impossible for an interested stakeholder to monitor the level of; royalties, taxes, fees and charges paid to the Federal Government. Hence, the paper critically assessed selected laws, code, practices and the essence of policy re-engineering to Nigeria’s oil and gas industry. Conclusions and contextual recommendations were also proffered. Keywords: transparency, oil & gas, law, policy, re-engineering, Nigeria JEL Classifications: O13, Q48

Will be there New CO2 Emitters in the Future? Evidence of Long-run Panel Co-integration for N-11 Countries

Abstract: This article tries to explore the long-run nexus between oil consumption, GDP and carbon dioxide (CO2) emissions in the Next eleven (N-11) countries over the period 1980-2013, by using the panel c-ointegration, the panel Dynamic OLS and the panel Fully modified OLS approaches.The empirical findings indicate that there is a bidirectional long-run linkage between oil consumption – GDP per capita and oil consumption- CO2 emissions. Moreover the inverted U-shaped linkage between the square of GDP per capita and CO2 emissions, supports the existence of Environmental Kuznets Curve (EKC) hypothesis. With estimations through the panel DOLS and FMOLS, the long-run elasticity of oil consumption per capita to CO2 emissions per capita is calculated about 0.96% and positive which is in contrast to the coefficient sign of its elasticity to GDP per capita (-0.48%). Moreover, the elasticity of GDP per capita and CO2 emissions per capita to oil consumption per capita are -0.32% and 0.94%, respectively. These findings prove the negative contribution of non-renewable energy (oil) consumption per capita to GDP per capita in the N-11 group. Furthermore, due to the bidirectional long-run relationships between oil consumption and CO2 emissions, these 11 countries should find the efficient energy policies which are in line with CO2 mitigation and reaching a higher GDP per capita growth. Keywords: Oil consumption per capita, GDP per capita, CO2 emissions per capita. JEL classifications : E21, Q54, Q56

Positive and Negative Effects of Research and Development

Abstract: This study aims to examine the effects of research and development expenditure on economic growth and carbon dioxide emission in the panel data for the period of 1996-2011 from 5 nations (Germany, Russian Federation, United Kingdom, United States and Canada). The panel co-integration was conducted and the results show that there is co-integrated relationship among the variables (R&D, GDP, Energy Use and Carbon Dioxide Emission). Then the FMOLS test was performed and the findings explain that energy use and R&D are the determinants of GDP. Results from FMOLS show that energy use and R&D are the determinants of GDP. Energy use and GDP are the determinants of carbon dioxide emission. Results from DOLS show that R&D is important to boost economic growth while energy use, GDP and R&D can have deleterious effects on carbon dioxide emission. Therefore, it is important to control the R&D expenditure to balance economic growth and environmental conservation. Keywords: R&D, Economic Growth, Carbon Dioxide Emission JEL Classifications : O32, Q40, Q50

Electricity consumption and manufacturing sector productivity in Nigeria: An ARDL-bounds testing approach

Abstract: This paper employs the Autoregressive Distributed Lag (ARDL) technique to provide evidence of long run and short run relationship, as well as the causality between manufacturing productivity and electricity consumption in Nigeria for the period 1980–2013. When electricity consumption, capital formation and manufacturing productivity are applied as the dependent variable(s), the bounds test provides a proof of cointegration among electricity consumption, manufacturing productivity, and capital. Similarly, the findings demonstrated bidirectional causality between manufacturing productivity and energy consumption. Nigeria is along this line an electricity reliant nation. It is likewise a nation in which electricity consumption is rising with the manufacturing productivity. This demonstrates that electricity is a powerful determinant of manufacturing performance in Nigeria; accordingly, policy on energy should guarantee that electricity creates less negative effects on manufacturing productivity. Keywords: Electricity Consumption, Manufacturing Productivity, ARDL, Nigeria JEL Classifications: Q430, O470

Do Foreign Direct Investment and Trade lead to Lower Energy Intensity? Evidence from Selected African Countries

Abstract: The aim of this study is to examine the impact of foreign direct investment (FDI) and trade on energy intensity in a sample of six Sub-Saharan countries. It applies the bounds testing approach to cointegration and Granger causality analysis to annual data covering the time period from 1970 to 2011. The results indicate evidence for energy-reducing effect of FDI in Benin and Nigeria, while in Cote d’Ivoire and Togo, energy efficiency declines as FDI increases. The results also indicate that energy intensity is negatively affected by imports in Cameroon, Cote d’Ivoire and Togo, suggesting that trade improves energy efficiency. Results of Granger causality suggest that in the short-run, energy intensity is caused by FDI in Cote d’Ivoire and Nigeria, and by imports in Cameroon and Nigeria. Keywords: Foreign direct investment; trade; energy intensity. JEL Classifications: C32; F21; Q43

Pollutant Emissions, Energy Consumption and Economic Growth in Nigeria

Abstract: The study investigates the direction of causal relationships among emissions, energy consumption and economic growth in Nigeria using annual time series data for the period 1970-2013. The Johansen maximum likelihood cointegration tests indicate an existence of a unique cointegrating vector, and the normalized long run estimates shows that fossil fuel enhances carbon emissions whereas, clean energy source (electricity) mitigate the atmospheric concentration of CO 2 emissions. Similarly, the Wald exogeneity Granger causality test indicates an existence of unidirectional causation running from fossil fuel to CO 2 emissions and GDP per capita. Alternatively, non-fossil energy (electric power) causes more proportionate change in GDP per capita but our result could not establish any causal link between electric power and carbon emissions. Finally, charting a channel towards ensuring sustainable environment and economic development involves a progressive substitutability of clean energy sources for fossil consumption. Keywords: CO 2 emissions, Energy Consumption, Johansen Cointegration, Granger Causality JEL Classifications: C22, O13, Q53

Modeling the impact of the oil sector on the economy of sultanate of Oman

Abstract: This study constructs and analyses a simple macroeconomic model that specifically tailored to model the impact of oil sector on the economy of Sultanate of Oman. The constructed model of the study measures the impact of oil sector on the Oman economy for the last three decades and also provides some forecasting for the major macroeconomics indicators related to the Oman economy. Model simulations indicate that the oil sector has large and positive impact on Oman GDP and its influence spills over to all other non-oil sectors of Oman economy. The study found that largest influence of oil was on the gas sector and the least economic sector influenced by oil was agricultural sector. The findings of the study suggest that Oman economy is far from being diversified and that the proposed model helps the policy makers in Oman to identify and forecast the impact of oil on other components of the Oman economy. Keywords: Macroeconomic modelling, oil, Oman JEL Classifications: C51; C53; E17; N15; Q43

The Relationship among Real Gross Domestic Product, CO2 Emissions, and Energy use in South Caucasus and Turkey

Abstract: The paper analyses the relationship among real GDP, CO 2 emissions and energy use in South Caucasus countries and Turkey over the 1992-2013 years. Results of unit root tests show that all variables are integrated of order one. In general, cointegration tests with breaks suggest the presence of a long-run relationship between these variables. Causality results suggest that “conservation hypothesis” holds for Armenia; while, for Azerbaijan and Georgia, we reached mixed results, since both “feedback hypothesis” and “growth hypothesis” received support by empirical findings. Finally, no evidence of causality emerges for Turkey, in favour of “neutrality hypothesis”. Therefore, the relevant policy implication of the study is that a common energy policy strategy would not be pursued by these countries, given the different causality links emerged in the area. Keywords: GDP; CO 2 emissions; energy use; South-Caucasus; Turkey; time-series. JEL Classifications : B22; C32; N55; Q43.

China’s Economic Growth and Energy Consumption

Abstract: Economic growth needs to consume large amounts of fossil energy, which will result in greenhouse gas emissions and global climate warming. Therefore, how to save energy and protect environment has become a worldwide problem. This paper establishes an econometric model including labor, fixed capital stock, energy inputs and other explanatory variables based on the Cobb-Douglas production function to empirically analyze the relation between China's economic growth and energy consumption. Meanwhile, this paper illustrates the relation of China's carbon dioxide emissions to export trade, too. The study results show that China still promotes economic growth at the costs of high energy consumption and heavily environment pollution. Therefore, how to achieve the transition of a high carbon economy to a low carbon economy will be a fundamental problem that has to solve in China's future development. To this end, China should participate in international environmental cooperation, promote energy saving and environment conservation. Keywords: Economic growth, Energy consumption, The Cobb-Douglas production function JEL Classifications: C32; O13; O24

The Joint Effects of Oil Price Volatility and Environmental Risks on Non-Performing Loans: Evidence from Panel Data of Organisation of the Petroleum Exporting Countries

Abstract: This paper analyses the joint effects of oil price volatility and environmental risks on non-performing loans. Using panel data of 12 Organisation of the Petroleum Exporting Countries for 2000-2014, we test hypotheses of joint effects of oil price changes and environmental risks on non-performing loans. Estimates from static panel model highlights the explanatory power of systemic risks theory in linking the effects of oil price volatility and environmental risks on NPLs and underpins their importance for policy implication purposes in OPEC member states. This calls for concerted policy and management response for assessing oil price sensitive and disaster riskiness of borrowing entities. This paper is of particular value to oil dependent countries such as OPEC member states that are net oil exporting countries. From the policy perspectives, there is need for banking regulators to consistently ensure the conduct of both micro-stress and macro-stress tests of loans against the systemic risks of oil price volatility. In addition, policymakers in the banking system should redesign their prudential guidelines to take care of the credit risks vulnerabilities associated with environmental risks and spread their risks across industries and geographical areas that are less prone to disasters. Keywords: Oil Price Volatility, Environmental Risks, Non-Performing Loans, OPEC JEL Classifications: G32, Q43, Q54

The Relationship between Crude Oil and Coal Markets: A New Approach

Abstract: The level of substitutability of crude oil and coal in production and consumption may lead to the relationship between them. In this paper, the relationships between crude oil market and coal market are investigated, using a structural vector autoregressive model (SVAR). We apply the Kilian Index (2009) to distinguish between the effects of oil market demand shocks and global aggregate demand shocks. The empirical results suggest that coal prices are affected by the supply and demand shocks of the oil market, while oil supply shocks have no effect on oil prices. This shows a high level of interaction between the crude oil market and the coal market, arising mainly due to the role of substitution. The effect of global aggregate demand on the price of coal is higher than the effect on the price of oil. Meanwhile, the fear of future oil supply affects the coal market only temporarily. Keywords: Crude oil price, Coal price, Oil supply shock JEL Classifications: Q41, Q43

How the Crude Oil Market Affects the Natural Gas Market? Demand and Supply Shocks

Abstract: In this paper, the global structural relationship between the prices of crude oil and natural gas is investigated using the recently introduced decomposition of the real price of crude oil by Kilian (2009). A four-variable structural vector autoregressive model (SVAR) for oil and natural gas markets is developed for this investigation. We find some evidence that the crude oil market affects the natural gas market through a combination of demand shocks rather than through oil supply shocks. The uncertainty about future oil supply causes precautionary demand in the oil market, which shifts to the natural gas market and increases the natural gas price as the primary substitute for oil. Meanwhile, global demand shocks influence both crude oil and natural gas prices, which leads to similar fluctuations in the prices of oil and natural gas. Consequently, demand shocks link oil and natural gas markets and produce similar changes in their prices. Keywords: Crude oil price, Natural gas price, Aggregate demand shock JEL Classifications: Q41, Q43

Dynamic Impact of Income Inequality on Carbon Dioxide Emissions in Africa: New Evidence from Heterogeneous Panel Data Analysis

Abstract: We extended the study of Zhang and Zhao (2014) for China, which examines the regional impact of carbon dioxide emissions on income inequality The present article examine the dynamic impact of income inequality on carbon dioxide emissions in Africa We applied heterogeneous panel ARDL techniques of Mean Group (MG) and Pooled Mean Group (PMG) suggested by Pesaran et al (1999), during 1984-2001 The main empirical result reveals that; the relationship between income inequality and carbon dioxide emissions is negative and statistically significant This means that; widening income inequality could lead to the reduction of carbon dioxide emissions in the sampled countries Moreover, the variables of trade openness, per-capita GDP, and urbanization are positive and statistically significant; this means that increase in any of these variables could lead to overall increase in the level of carbon dioxide emissions Therefore, in providing policies that will be used to improve environmental quality in Africa, income inequality should not be considered because it is reducing the level of environmental degradation through reduction of carbon dioxide emissions Hence, policy makers should not consider income inequality when formulating environmental policies among the selected sample countries Keywords : Income inequality, emissions, Mean Group, Pooled Mean Group, Panel ARDL, Africa JEL Classifications: F64, Q54, Q58

Energy Pricing Policy and Environmental Quality in Nigeria: A Dynamic Computable General Equilibrium Approach

Abstract: The fuel subsidy policy as a policy had been argued to hamper efforts at environmental sustainability. Thus, this study investigates the extent to which the removal of fuel subsidy influences the level of carbon emissions in Nigeria over a 5 year period. It adopts the recursive dynamic version of the partnership for economic policy computable general equilibrium model based on the 2006 Nigerian social accounting matrix. Simulating a partial, gradual and complete removal of import tariff on imported petrol indicates reduction of emissions only when subsidy removal was partial. Findings from the results showed carbon emissions marginally increased under the gradual and one shot removal. This suggests that removing petrol subsidy was not sufficient to reduce carbon emissions level, but should be accompanied with necessary supporting policies. Fuel blending can be a useful alternative to fossil fuel along with renewable energy and green growth practices to ensure a low-carbon growth strategy.

Public-Private Participation in Energy Infrastructure in Middle East and North African Countries: The Role of Institutions for Renewable Energy Sources Diffusion

Abstract: Investment in infrastructure, although historically dominated by public intervention, are experiencing a growing role for public and private partnership. This trend traced a steady increase since the start of privatization and liberalization process that took place in most OECD countries in the 90s and peaked in 2012. Middle East and North African (MENA) countries are hungry for infrastructural investment, but looking at the consolidated global trends in energy investment, it emerges that its performance is particularly poor in attracting private participation. However, Morocco was able to figure among the top destination countries for energy investment. Together with Jordan they represent the only two countries able to attract energy investment in the region mostly in renewable energy technology. Evidence shows that Morocco and Jordan are those that perform better in terms of political stability score and rule of law score according to the World Bank. The institutional and political endowment in MENA countries appear to be inappropriate to secure the level of infrastructural investment in the energy sector, in particular when dominated by long lead times and irreversibility. In this context, renewable energy sources investment offer a valid alternative, when the necessary pre-conditions are put in place and when the regulatory design is able to offset, at least partially, the higher country risk that investor are likely to face. Keywords: Public Private Partnership, Investment, Middle East and North Africa, Energy Transition, Institutional Endowment, Renewable Energy Sources Investment JEL Classifications: D02, L43, O13

Economic Problems of Exploring Hydrocarbons in Russian Northern Provinces in the Context of International Interests

Abstract: The goal of the article is to analyze the present state and perspectives of exploring gas and oil resources of the Russian North in the context of economic interests of a number of foreign countries, to reveal both common things in interests of the both parties, and inconsistencies that must be aligned. The methodology of the research is based on the system approach to estimating the state of gas and oil resources of the Russian North and comprehensive analysis of aligning economic interests of Russia and a number of foreign countries. A complex of general scientific and special methods of research was used, including abstract-logical, balance, statistical analysis and others. The article shows that the Russian North is extremely rich in gas and oil resources that are both currently exploited and promising for reclaiming especially on the shelf of Arctic seas. It analyzes reasons of the decrease in the gas and oil production in the country that has occurred over recent years. It is caused by the fall of the demand for hydrocarbons in the world, sectoral sanctions, and the decrease in the production of the mineral resources base. Gas and oil resources of Russia fall within the interests of a number of foreign countries, mainly West European countries for which stable provision of the economy with raw hydrocarbons becomes one of the most important strategic tasks. Long-term economic interests of Russia coincide with the interests of the European Union, however, not fully. The authors come to the conclusion that in case of supplying hydrocarbons economic interests of Russia and European Union countries must be aligned not only in terms of searching for mutually profitable forms of cooperation but also solving basic inconsistencies that lie in the basis of opinions discrepancies. Keywords: gas and oil resources, the Russian North, Arctic shelf, Western European countries, Asia-Pacific countries, alignment of interests. JEL Classifications: , D74, F00, L71, Q32, Q34

Co-integration between Electricity Supply and Economic Growth in South Africa

Abstract: This study probes the short and long run relationship between economic growth, electricity supply, trade openness, electricity prices, employment and capital in South Africa within a multivariate framework. The autoregressive distributed lag bound testing was employed to establish the long run relationship between these variables using data for the period between 1985 and 2014. Major findings of the study include that economic growth, electricity supply, trade openness, electricity prices, employment and capital are co-integrated. Overall, the paper suggests that efficient planning and increased investments in electricity supply industry infrastructure is of essence to solve the problem of electricity supply as this would force the sustainable economic growth in South Africa. Keywords: Electricity Supply, Economic Growth, South Africa JEL Classifications: O13, Q43

Which Energy-Growth Hypothesis is Valid in OECD Countries? Evidence from Panel Granger Causality

Abstract: This paper aims to determine which energy consumption-economic growth hypothesis is valid in OECD countries. For this purpose, we used panel cointegration, panel Granger causality and panel vector error correction model for the period of 1995-2013. Panel cointegration test outcomes support the long-term equilibrium link among economic growth, energy consumption, labor force and capital formation. The consequences obtained from panel vector error correction model suggests that there is evidence of bi-directional causality between energy consumption and economic growth in the short-term. However, a long-run causality is not found between energy consumption and economic growth. This implies indicated that the OECD countries’ economies are founded on energy and the feedback hypothesis is valid in OECD countries. Policy makers in OECD countries consider the feedback effect by employing arrangements to cut energy consumption. Keywords: Energy consumption, economic growth , cointegration, causality, OECD countries JEL Classifications: C23; Q43

A Causal Relationship between Energy Consumption, Energy Prices and Economic Growth in Africa

Abstract: This paper examines the causal relationships between energy consumption, income and energy prices for the African countries using Johansen’s maximum-likelihood test of cointegration and error-correction model (ECM). To have a reliable estimate, only countries having data availability for a minimum period of 25 years were considered. This requirement reduces the sample size to 26 countries only. Out of these, a long run cointegrating relationship was found for a total of six countries, which was then subsequently analyzed to confer on the direction of causality. Out of the reported five countries, we found the existence of bidirectional Granger causality for Ethiopia, Morocco and Mozambique. The result for Angola suggests unidirectional Granger causality running from income to energy consumption while no Granger causality for the case of Tanzania. Findings suggest that countries regardless of their level of income and development should direct their energy conservation policies on the basis of the energy-output causality relation.

The Asymmetric Effects of Oil Price Shocks on the Canadian Economy

Abstract: A threshold vector autoregression (TVAR) is estimated to study the effects of oil price shocks on Canadian output and price level. While much of the literature has investigated potential asymmetric effects of positive and negative oil price shocks within a linear vector autoregression (VAR), we do so within a nonlinear VAR. Further, we extend the analysis to consider the correlation between asymmetries associated with the business cycle phase and size/sign asymmetries. Positive oil price shocks are found to have a stronger effect on output than negative oil price shocks. This asymmetry is significant in recessions, but lessened during expansions. The results also suggest that the reduction in inflation due to a negative oil price shock is larger than the increase in inflation following a positive oil price shock, especially during periods of low output growth. Yet, neither inflation nor output growth seems to vary disproportionately with the size of the oil price shock. In general, the results are robust to the ordering of the variables in the VAR process and to the time window over which the net oil price change is computed. Keywords: Net Oil Price Increase, Asymmetry, Vector Threshold Autoregressions, Nonlinear Impulse Response Functions JEL Classifications : C32, E32, Q43

Household Income Structure and Electrical Appliance Ownership: Evidence from Japanese National Household Survey

Abstract: Earlier research examined how total household income determines appliance ownership. However, this study uses micro data from the Japanese National Survey of Family Income and Expenditure to examine how income structure and wealth determine the number of appliances in a household. Household income structure does affect appliance ownership: though non-labor income lowers the likelihood of dishwasher ownership, labor income raises it. Wives’ incomes and non-labor income increase the number of TVs while a husband’s income decreases it. Appliance ownership is predominantly determined by housing conditions. Households owning a detached house have more appliances, though more frequently install solar water heaters. Keywords: Appliance ownership; Household Income Structure; Micro data JEL Classifications: D12; D13; Q41

The Effects of Oil Shocks on Turkish Macroeconomic Aggregates

Abstract: This paper examines the impacts of oil price shocks on macroeconomic aggregates of Turkey. We find evidence suggesting the influential role of oil price shocks on macroeconomic aggregates. In other words, we find that oil price shocks affect output growth negatively with a delay. However, higher oil prices are associated with higher inflation, and depreciating exchange rate. We also explore the role of asymmetric oil shocks on macroeconomic aggregates and find that both oil price increases and decreases are associated with a delayed lower output growth rate. Furthermore, we find oil price increases affect inflation positively a delay. The appreciation of exchange rate appears with a delay due to oil price decreases. Keywords : Oil Price Shocks, Economic Activity, Turkey JEL Classification : C22, C32, Q43