Do energy, inflation, and financial development stimulate economic welfare in India? Empirical insights from novel dynamic ARDL and KRLS simulations

Mohammad Subhan (), Aqsa Anjum (), M. N. Zamir () and Dervis Kirikkaleli
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Mohammad Subhan: Aligarh Muslim University
Aqsa Anjum: Aligarh Muslim University
M. N. Zamir: Aligarh Muslim University

Economic Change and Restructuring, 2024, vol. 57, issue 4, No 9, 27 pages

Abstract: Abstract The present study focuses on investigating the effect of renewable and non-renewable energy consumption (REC and NREC), financial development (FD), and inflation (INF) on economic welfare (EW) in India during 1990–2019. In this research, we employ a novel dynamic autoregressive distributed lag model and a kernel-based machine learning algorithm and regularise least squares to detect causal linkages among the variables. To measure the economic welfare index, this research uses the PCA analysis with GDP, human capital, environmental damage, number of employed persons, life expectancy at birth, and real consumption in households and by the government. According to the findings, the NREC and FD have been favourably contributing to EW. Conversely, the EW is adversely affected by REC. However, INF also has an adverse impact on EW, although it may be insignificant in the long run and significant in the short run.

Keywords: GDP; Energy consumption; Economic welfare; Financial development; Inflation (search for similar items in EconPapers)
JEL-codes: D6 E31 G00 O13 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10644-024-09723-9

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