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Short-run and Long-run causality between electricity consumption and economic growth in a small open economy

Helmi Hamdi () and Rashid Sbia ()

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this paper is to investigate the causal relationship between electricity consumption and GDP growth for the kingdom of Bahrain during the period 1980–2008. By performing an error-correction model, our results reveal that electricity consumption and GDP are cointegrated. The granger causality tests indicate bi-directional relationship between electricity consumption and GDP growth in the long-run while results of the short-run reveal unidirectional causality relationship between the two variables.

Keywords: Electricity consumption; Growth; Bahrain; cointegration; Granger causality (search for similar items in EconPapers)
JEL-codes: O44 O47 Q4 (search for similar items in EconPapers)
Date: 2012
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