The relationship between an electricity supply ceiling and economic growth: An application of disequilibrium modeling to Taiwan

Mototsugu Fukushige () and Hiroshige Yamawaki

Journal of Asian Economics, 2015, vol. 36, issue C, 14-23

Abstract: Using a disequilibrium model, we investigate the relationship between the supply constraint of electricity generation capacity and electricity demand in Taiwan. We find that electricity consumption faced supply constraints in Taiwan between 1959 and 1972, but that generation capacity grew rapidly after 1973, such that economic growth came to be the major determinant of electricity consumption. Our experience in fitting this disequilibrium model suggests that simple causality tests are not a proper means to understand the relationship between electricity consumption and economic growth. Our results also suggest, at least for developing countries, that an electricity supply constraint sometimes plays an important role when investigating the relationship between energy consumption and economic growth.

Keywords: Electricity supply; Economic growth; Disequilibrium modeling; Taiwan (search for similar items in EconPapers)
JEL-codes: C34 O14 Q43 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Working Paper: The relationship between an electricity supply ceiling and economic growth: An application of disequilibrium modeling to Taiwan (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:36:y:2015:i:c:p:14-23

DOI: 10.1016/j.asieco.2014.11.004

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