Renewable energy consumption and economic growth in Indonesia. Evidence from the ARDL bounds testing approach

Hlalefang Khobai

No 1806, Working Papers from Department of Economics, Nelson Mandela University

Abstract: This study serves to examine the effects of renewable energy consumption on economic growth in Indonesia. Quarterly time series data was used for the period 1990 – 2014. Applying the autoregressive distributed lag (ARDL) bounds testing approach, the study established that there is a long run relationship between economic growth, renewable energy consumption, carbon dioxide emissions, capital and employment. It is established that renewable energy consumption has a significant positive effect on economic growth both in the long run and short run. The findings from the vector error correction model (VECM) technique suggest that there is a long run causality flowing from renewable energy consumption, carbon dioxide emissions, capital and employment to economic growth. The findings of this study suggest that the government, energy policy makers and associated bodies should act together to improve on the renewable energy infrastructure and lower carbon growth in Indonesia.

Keywords: Renewable energy consumption; Economic growth; Co-integration; Causality; Indonesia. (search for similar items in EconPapers)
JEL-codes: D04 Q01 Q42 Q47 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2018-02, Revised 2018-02
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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Working Paper: Renewable energy consumption and economic growth in Indonesia. Evidence from the ARDL bounds testing approach (2018)
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