Disaggregated Energy Demand by Fuel Type and Economic Growth in Malaysia

Hooi Hooi Lean () and Russell Smyth

No 43-13, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: We use an augmented production function approach to examine the relationship between disaggregated energy consumption by fuel type and economic growth in Malaysia. The main finding is that diesel and motor petrol are the major contributors to economic growth in the long-run in Malaysia. The long run elasticity for diesel is 1.1, while the long run elasticity for motor petrol is 0.5. The problem for Malaysia is that both diesel and motor petrol are major causes of acidification and greenhouse emissions and that Malaysia’s reserves of oil are depleting. The results suggest that the challenge moving forward for Malaysia will be to replace diesel and motor petrol with cleaner biodiesel alternatives, which will not adversely affect Malaysia’s growth rate. The prospects for so doing, and measures taken thus far, are discussed.

Keywords: Disaggregated energy consumption; Elasticity estimation; Malaysia (search for similar items in EconPapers)
Pages: 30 pages
Date: 2013-07
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Citations: View citations in EconPapers (4)

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Journal Article: Disaggregated energy demand by fuel type and economic growth in Malaysia (2014)
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