Asymmetric Cointegration and Causality between Natural Gas Consumption and Economic Growth in Nigeria

Mukhtar Danladi Galadima and Abubakar Wambai Aminu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates asymmetric cointegration, asymmetric adjustment, and causality between natural gas consumption and economic growth in Nigeria using the momentum threshold autoregressive (M-TAR) model and the Granger-causality test in a momentum threshold error correction model (M-TECM). The results revealed evidence of asymmetric cointegration, asymmetric adjustment which suggests that the negative discrepancies from the equilibrium error adjust more rapidly than the positive discrepancies and that there is bidirectional causality between the two variables. The implication of the results is that a shock that decreases the impact of natural gas consumption on economic growth adjusts more rapidly than a shock that increases it and that a consistent natural gas supply increases growth and similarly a rise in growth leads to rise in natural gas consumption. Therefore, policymakers in Nigeria need to confine more attention to the shocks stemming from the decrease in natural gas consumption and the country should adopt energy exploration policies.

Keywords: Keywords: Asymmetric Cointegration; Asymmetric Adjustment; Causality; Natural Gas Consumption; Economic Growth (search for similar items in EconPapers)
JEL-codes: Q43 (search for similar items in EconPapers)
Date: 2017-11-30
New Economics Papers: this item is included in nep-ene and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Economics and Policy of Energy and the Environment 3 (2017): pp. 59-71

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:85619

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