A multivariate analysis of the causal flow between renewable energy consumption and GDP in Tunisia

Ousama Ben-Salha and Maamar Sebri ()
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Maamar Sebri: Faculty of Economics and Management of Sousse and LaREMFiQ, IHEC, University of Sousse, Tunisia

Economics Bulletin, 2014, vol. 34, issue 4, 2396-2410

Abstract: This paper examines the causality linkages between economic growth, renewable energy consumption, CO2 emissions and domestic investment in Tunisia between 1971 and 2010. Using the ARDL bounds testing approach to cointegration, long-run relationships between the variables are identified. On the other hand, the Granger causality analysis indicates that there is bi-directional causality between renewable energy consumption and economic growth, which supports the validity of the feedback hypothesis. In addition, the quantity of CO2 emissions collapses as a reaction to an increase in renewable energy consumption. These findings remain robust even when controlling for the presence of structural break. We conclude that more efforts should be undertaken to further develop a suitable infrastructure to the renewable energy sector, given its enhancing-effects on economic growth and reducing-effects on CO2 emissions.

Keywords: Renewable energy consumption; GDP; ARDL; Granger causality; Structural break; Tunisia. (search for similar items in EconPapers)
JEL-codes: Q2 Q4 (search for similar items in EconPapers)
Date: 2014-11-13
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: A multivariate analysis of the causal flow between renewable energy consumption and GDP in Tunisia (2013)
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