New Evidence on the Relationship Between Crude Oil Consumption and Economic Growth in the US: A Quantile Causality and Cointegration Approach

Amine Lahiani (), Ramzi Benkraiem, Anthony Miloudi and Muhammad Shahbaz
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Amine Lahiani: LEO - Laboratoire d'Économie d'Orleans [FRE2014] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique, Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School
Ramzi Benkraiem: Audencia Business School
Anthony Miloudi: Excelia Group | La Rochelle Business School, CRIEF [Poitiers] - Centre de recherche sur l'intégration économique et financière [EA 2249] - UP - Université de Poitiers = University of Poitiers

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Abstract: This paper investigates the long-run and short-run relationship between WTI crude oil consumption and economic growth, covering the US economy for the period from 1955Q1 to 2016Q4. The Quantile ARDL approach developed by Cho et al. (2015) is applied to examine the long-run cointegrating relationship between the variables. Additionally, a quantile Granger causality test developed by Troster (2017) is also applied to examine the causal association between crude oil consumption and economic growth. The empirical evidence underscores the presence of nonlinearities and locational asymmetries. The growth hypothesis holds for the smallest quantiles, suggesting a unidirectional causality relationship running from oil consumption to economic growth. A feedback effect between oil consumption and economic growth is found for the medium quantiles. This empirical evidence has concrete implications for economists and energy policy makers.

Date: 2019-06
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Published in Journal of Quantitative Economics, 2019, 17 (2), pp.397-420. ⟨10.1007/s40953-018-0147-2⟩

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Related works:
Journal Article: New Evidence on the Relationship Between Crude Oil Consumption and Economic Growth in the US: A Quantile Causality and Cointegration Approach (2019)
Working Paper: New Evidence on the Relationship Between Crude Oil Consumption and Economic Growth in the US: A Quantile Causality and Cointegration Approach (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03676181

DOI: 10.1007/s40953-018-0147-2

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