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Dynamics of Electricity Consumption, Oil Price and Economic Growth: Global Perspective

Muhammad Shahbaz (), Suleman Sarwar, Chen Wei and Muhammad Nasir Malik

MPRA Paper from University Library of Munich, Germany

Abstract: This study uses the data from 157 countries from 1960 to 2014 to analyze the relationship between economic growth, electricity consumption, oil prices, capital, and labor. The economic growth of developing countries with industrial infrastructure has a more significant association with electricity consumption than oil prices. We use oil prices and electricity consumption jointly to study highly predictive observations for economic growth. The data are categorized by income, OECD and regional levels. The panel cointegration, long-run parameter estimation, and Pool Mean Group tests are used to analyze the cointegration and short-run and long-run relationships between the variables. The empirical results indicate the presence of cointegration between the variables. The presence of feedback effects between electricity consumption and economic growth, oil prices and economic growth is valid. These findings confirm that inspite of the oil prices, developing countries rely heavily on electricity consumption for economic growth.In the short run, growth and feedback effects suggest that more vigorous electricity policies should be implemented to attain sustainable economic growth for the long-term.

Keywords: Electricity Consumption; Oil Prices; GDP; Capital; Population (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-gro
Date: 2017-05-01, Revised 2017-05-06
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Journal Article: Dynamics of electricity consumption, oil price and economic growth: Global perspective (2017) Downloads
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