The causal relationship between coal consumption and economic growth in the BRICS countries: Evidence from panel Granger causality tests

Tsangyao Chang, Frederick Deale (), Rangan Gupta, Roulof Hefer (), Roula Inglesi-Lotz and Beatrice Desiree Simo-Kengne ()
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Frederick Deale: Department of Economics, University of Pretoria
Roulof Hefer: Department of Economics, University of Pretoria

No 201369, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper empirically analyses the causal linkages between coal consumption and economic growth in the BRICS countries using annual data from 1985 to 2009. We apply a panel causality methodology that accounts for both cross-section dependence and heterogeneity across countries. Empirical results provide evidence of no causal relationship between the two variables; suggesting that neither coal consumption nor economic growth is sensitive to each other. While this finding vindicates the neutrality hypothesis for the BRICS countries, the individual country results, however, provide support for a unidirectional causality running from coal consumption to economic growth for India and the opposite for South Africa. Therefore, increasing coal consumption might not have a significant impact on economic growth for the BRICS countries.

Keywords: Coal Consumption; Economic Growth; Dependency and Heterogeneity; Panel Causality (search for similar items in EconPapers)
JEL-codes: C32 C33 Q43 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2013-11
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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:201369

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