Energy consumption and economic growth: An empirical study of the electricity consumption in Saudi Arabia

Imed Mezghani and Hedi Ben Haddad

Renewable and Sustainable Energy Reviews, 2017, vol. 75, issue C, 145-156

Abstract: This study employs the Time-Varying Parameters Vector Autoregressive (TVP-VAR) model with stochastic volatility to examine inter-temporal dynamics between Saudi Arabian real GDP (oil, non-oil), electricity consumption and CO2 emissions levels for 1971–2010. The results show that the TVP-VAR model is of use for examining the dynamics of the relationship between electricity consumption, real GDP and CO2 emissions. Moreover, an analysis of time-varying impulse responses of real GDP (oil, non-oil), electricity consumption and CO2 emissions to structural shocks suggests that responses depend on the magnitude of structural volatilities of real GDP (oil, non-oil), electricity consumption and CO2 emissions shocks. Indeed, we find that the observed high volatility of electricity consumption in the1970's and 1980's is likely to have persistent negative effects on oil GDP levels and CO2 emissions and positive effects on real non-oil GDP levels. The observed high and low volatility of oil GDP levels positively affects electricity consumption and CO2 emissions. However, highly volatile non oil-GDP levels are likely to affect electricity consumption and CO2 emissions positively. These findings imply that energy policies must consider high-and low-volatility regimes of real GDP, electricity and CO2 emissions shocks and time-varying patterns of the relationships between real GDP, electricity consumption and CO2 emissions.

Keywords: Carbon dioxide emission; Electricity consumption; Economic growth; Stochastic volatility; Time-varying parameter vector autoregressive model; Saudi Arabia (search for similar items in EconPapers)
JEL-codes: C11 C15 E52 Q43 Q53 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032116307110
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:75:y:2017:i:c:p:145-156

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2016.10.058

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().