Energy Consumption and Economic Growth: A Case Study of Three SAARC Countries

European Journal of Social Sciences 01/2010; 16(2):206-213. DOI: 10.2139/ssrn.2124639

ABSTRACT Energy is a crucial component to economic growth and plays a vital role in economic
development. This study inquires the causal relationships between energy consumption
(EC) and the economic growth (EG) within a multivariate framework that includes capital
stock and labor input for the panel of three SAARC countries by using modern panel unit
root technique, residual based panel cointegration and panel based error correction models
.The empirical results fully support a cointegration relationship between EC and EG in the
long run. But from the causal point of view there is long run unidirectional causality
running from EC to EG and no causality was found in the short run.

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May 29, 2014