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Electricity consumption and economic growth across Australian states and territories

Sefa Awaworyi Churchill and Kris Ivanovski

Applied Economics, 2020, vol. 52, issue 8, 866-878

Abstract: This study investigates the long-run and short-run dynamics between electricity consumption (along with traditional inputs such as labour and capital) on economic output for a panel of seven Australian states/territories over the period 1990 to 2015. Our panel results suggest that electricity consumption is positively related to gross state product in both the long-run and short-run, and the growth effect also extend to traditional inputs such as capital and labour. However, the state/territory-specific results identify both positive and negative relationships between electricity consumption and gross state product. Furthermore, we find evidence of bi-directional causality between state economic growth and capital, labour and electricity consumption, highlighting the importance of traditional inputs as well as electricity consumption in the growth process.

Date: 2020
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DOI: 10.1080/00036846.2019.1659932

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