The dynamics of oil consumption and economic growth in Malaysia

Sun-Young Park and Seung-Hoon Yoo ()

Energy Policy, 2014, vol. 66, issue C, 218-223

Abstract: This study attemps to investiagte the causal relationship between oil consumption and economic growth in Malaysia where oil consumption and real gross domestic product have been rapidly increased in recent years. To this end, the study employs annual data covering the period 1965–2011. Tests for unit roots, co-integration, and Granger-causality based on the error-correction models are presented. The overall results support the existence of bi-directional causality between oil consumption and economic growth in Malaysia. This means that an increase in oil consumption directly affect economic growth. Thus, in order not to make an adverse effect on economic growth, Malaysia should endeavor to overcome the constraints on oil consumption. Moreover, it appears that economic growth induces oil consumption.

Keywords: Oil consumption; Economic growth; Causality (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:66:y:2014:i:c:p:218-223

DOI: 10.1016/j.enpol.2013.10.059

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