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Asian Economic and Financial Review
Publish by: Production and Hosting by Pak Publishing Group on behalf of Asian Economic and Social Socie
Online ISSN: 2222-6737
Print ISSN: 2305-2147
Print ISSN: 2305-2147
Energy Consumption and Economic Growth: A Disaggregate Approach
Mohsin Nawaz, Mahpaar Sadaqat, Naveed Wahid Awan, Maria Qureshi
This paper attempts to examine the long run as well as short run relationship between Pakistan’s real GDP and energy consumption at sectoral level. The analysis is based on the time series data from 1977 to 2010. We estimate the DOLS cointegration to check the long run relationship. The results indicate the long run relationship between energy consumption and real GDP on aggregate level as well as in industry and services sector but no evidence is found in agriculture sector. This paper also examines the direction of causality by employing Granger causality test and found bidirectional causality between variables under study and unidirectional causality runs from real GDP to energy consumption for industrial and services sectors but result is reverse for agriculture sector.
- Adjaye, J.A. (2000), “The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries”. Energy Economics, Vol. (22), pp. 615–25.
- Altinay, G and Karagol, E. (2005), “Electricity consumption and economic growth: evidence from Turkey”, Energy Economics, Vol. 27, pp. 61– 68.
- Aqeel, A. and Butt, M. S. (2001) “The relationship between energy consumption and economic growth in Pakistan”, Asia-Pacific Development Journal, Vol. 8 (2), pp. 101-10.
- Cheng, B.S., Lai, T.W. (1997) “Government expenditure and economic growth in South Korea: a var approach”, Journal of Economic Development, Vol. 22, pp.11-24.
- Dickey, D.A. and W.A. Fuller. (1979), “Distribution of the estimators for autoregressive time-series with a unit root”, Journal of the American Statistical Association, Vol. 74, pp. 427-31.
- Ghali, K.H., and El-Sakka, M.I.T. (2004) “Energy use and output growth in Canada: a multivariate cointegration analysis”, Energy Economics, Vol. 26 (2), pp.225–38.
- Glasure, Y. U. (2002) “Energy and national income in Korea: further evidence on the role of omitted variables”, Energy Economics, Vol.24, pp.355-65.
- Granger, C.W.J. (1969), “Investigating causal relations by econometric models and cross spectral methods”, Econometrica, Vol. 37, pp. 424-38.
- Hondroyiannis, G., Lolos, S., and Papapetrou, E. (2002) “Energy consumption and economic growth: assessing the evidence from Greece”, Energy Economics, Vol.24, pp.319-36.
- Imran, K and Siddiqui, M. M. (2010), “Energy consumption and economic growth: a case study of three SAARC countries”, European Journal of Social Sciences, Vol.16 (2), pp. 206-13.
- Jumbe, C. B. L. (2004). “Cointegration and causality between electricity consumption and GDP: empirical evidence from Malawi”, Energy Economics, Vol. (26), pp. 61– 68.
- Kamal, R. D. (2008) “A Causal relationship between energy consumption and economic growth in Nepal", Asia-Pacific Development Journal, Vol.15, No.1, pp. 130-50
- Lee, C-C. (2005), “Energy consumption and GDP in developing countries: a co integrated panel analysis”, Energy Economics, Vol. (27), pp. 415-27.
- Lee, C.C and Chang, C.P (2007) “Energy consumption and GDP revisited: A panel analysis of developed and developing countries”, Energy Economics, Vol.29, pp.1206–23.
- Masih, A.M.M. and Masih, R. (1996) “Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modeling techniques”, Energy Economics, Vol.18, pp165-183.
- Morimoto, R. and Hope, C. (2004) “The impact of electricity supply on economic growth in Sri Lanka”, Energy Economics, Vol. 26, pp.77–85.
- Perron, P. (1988), “Trends and random walks in macroeconomic time series”, Journal of Economic Dynamics and Control, Vol.12, pp. 297-332.
- Phillips, Peter C.B. and Pierre Perron (1988), “Testing for unit root in time series regression,” Biometrika, Vol. 75(2), pp335-46.
- Stern, D.I. (2000) “A multivariate cointegration analysis of the role of energy in the US macroeconomy”, Energy Economics, Vol.22, pp.267-83.
- Stock, James H. and Mark W. Watson (1993), “A simple estimator of cointegrating vectors in higher order integrated systems,” Econometrica, Vol. 61(4), pp. 783-820.
- Yang, H. Y., (2000) “A note on the causal relationship between energy and GDP in Taiwan", Energy Economics, Vol.22, pp.309-17.
An Empirical Assessment of the Real Exchange Rate and Poverty in Nigeria
Ben. U. Omojimite, Victor E. Oriavwote
This paper investigated the influence of the real exchange rate on poverty within the framework of a dependent economy model. Using data covering 1980 to 2010, the result of a Vector Error Correction model (VECM) showed that the volatility of the real exchange rate has significant influence on the level of poverty in Nigeria. Thus, government policies that targets real exchange rate could play significant role in reducing the level of poverty in Nigeria, particularly if supported by basic institutions, such as those of human capital development.
- Akpan, E.O. and Udoma, J.A. (2008) “ Exchange Rate Policies and Economic Growth in Nigeria” In Iyoha, M.A. and Samuel, .A.J. (eds.).The Challenges of Sustainable Growth and Poverty Reduction in Nigeria, Benin City: Mindex Publishing Company.
- Antonopoulos, R., (1999) “A Classical Approach to Real Exchange Rate Determination with an Application for the Case of Greece”. Review of Radical Political Economics. Vol. 31, No. 3: 53-65.
- Greg, N. (2006) “ Exchange Rate Stability and Poverty Reduction in Nigeria” Central Bank of Nigeria Bullion Volume 20. No. 3
- Gujarati, D. N., (2003) Basic Econometrics (4e). New York: McGraw-Hill Inc.
- Harris, R., (1995) Using Cointegration Analysis in Econometric Modelling. London: Prentice Hall.
- Harrison, P. (1993) Inside the Third World: the Classic Account of Poverty in the Developing Countries, London: Penguin Books
- James, A. (2008) “Poverty and Poverty Alleviation in Nigeria: the Poverty of Impressionistic Schemes”. In Iyoha, M.A. and Samuel, .A.J. (eds.).The Challenges of Sustainable Growth and Poverty Reduction in Nigeria, Benin City: Mindex Publishing Company
- Kamin, S.B. and Khan, M. (1998) “ Some Multi-Country Evidence on the Effects of Real Exchange Rate on Output”. International Finance Discussion Paper, No. 611, Washington D.C. Federal Reserve Board.
- Kempa, B., (2005) “An Oversimplified Inquiry into the Sources of Exchange Rate Variability”. Economic Modelling. Vol.22, pp. 439-458.
- Modey, S.A.(1992) “On the Effect of Devaluation During Stabilization Programmes in LDCs”, Review of Economics and Statistics. Vol. 74 No. 1 21-27 Newswatch Magazine, August 7, 2000 New swatch Magazine, November 25 2002
- Ogun, O. (2004) “Real Exchange Rate Behaviour and Non-oil Export Growth in Nigeria”. African Journal of Economic Policy, Vol. 11, No.1
- Oumar, D (2007) “Poverty and Real Exchange Rate: Evidence from Panel Data. Journal of African Development Spring Vol. 1 No.1
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Nuclear Energy in Turkey, Do We Need It Indeed?
Two main events happened in 2007’s forced Turkey to reconsider of nuclear power plant building which has been postponed in several occasions. On the one hand Turkey aware that energy dependency to another states causing the negative effects to its developing economy, on the other hand she should take into consideration the threat coming by the Iran’s ongoing nuclear program. If Iran succeeds to produce a nuclear weapon, for Turkey the threat is indirect, and more tied to concerns about the balance of power and loss of relative status and influence in the region. With regard to the energy resources dependency to the other states, approximately 70 percent of Turkey’s domestic oil and gas are bought from abroad, and Russia and Iran are its top suppliers. Our country’s electricity demand tends to increase by a rapid average of 7.5%. Having been realized as 191.5 TWh in 2007, our electricity generation is expected by 2020 to reach 406 TWh with an annual increase of 5.96%. In order to meet the increasing demand for electricity, we need to at least double our existing installed power by 2020. To meet the need of Turkey for electricity in the near future, the projections indicate that it will be necessary to employ nuclear power for electricity production Construction of nuclear power plants is in progress. It seems determining the main target of Turkey’s desire to deal with the nuclear technology is very important for USA and the western states. This study aims to point out that which main factor is dominant for Turkey’s decision dealing with the nuclear technology, and foreseen Russian agreement.
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Vietnam Economic Structure Change Based on Input-Output Table (2000-2007)
Bui Trinh, Kiyoshi Kobayashi, Nguyen Viet Phong
This study presents main findings on Vietnam economic structure change based on Leontief system and the Vietnam Input-Output Tables (2000 and 2007).
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Islamic Financial in the Global Financial System
Ahmad M. Mashal
This paper investigates the question of whether the phenomenon of Islamic finance who based on Shariah, or Islamic law is truly globalizing and spreading as a universal system of finance and banking. The paper also addresses various aspects of the globalization for Islamic finance, among other, the issue of the rise of Islamic banking in the world, Islamic jurisprudence and finance, global standards and integration for Islamic finance, and obstacles facing Islamic finance’s integration and growth into the global financial system. the paper suggested three key areas of priority warrant greater policy attention to further strengthen and enhance the entire Islamic financial ecosystem, through putting in place building blocks that will strengthen the resilience of the Islamic financial system and by the application of mutually acceptable rules and standards.
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- O’Brien, Christopher (2009) ?Applying Globally Accepted Shari’ah Standards across Markets?, Standard & Poors, March.
- Oliver Wyman (2009) ?The Next Chapter in Islamic Finance – Higher Rewards But Higher Risks?.
- Ricardo Baba, hanudin Amin, (2009) "offshore bankers' perception on Islamic banking niche for Labuan: an analysis," International journal of Commerce and Management, Vol.19, No. 4, pp. 293-308.
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Market Liquidity Behaviour in Futures Markets: Empirical Evidence
Fathi ABID, Lotfi TRABELSI
In this study, we examine the relations between the three keys variables of liquidity such as trading volume, bid-ask spread, and intraday price volatility. Hausman’s (1978) tests of specification confirmed that trading volume, bid-ask spread and intraday price volatility are jointly determined. Our study, leaded with a different approach to estimate the three parameters in a three-equation simultaneous structural model, confirm Hausman’s (1978) conclusions. Empirical analysis, based on eight financial futures contracts, the most actively traded futures contracts in the Chicago Board of Trade (CBT) and the Chicago Mercantile Exchange (CME) markets, use the generalized method of moments (GMM) procedure. Empirical results, supporting theoretical developments, indicate the existence of a simultaneous relationship between these three variables of financial markets liquidity.
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An Empirical Analysis of the Determinants of Household Poverty in Turkey
Ebru Cağlayan , Naime İrem Koşan, Melek Astar
This paper investigates the determinants of household poverty in Turkey using ordered logit model. It also focuses on parallel regression hypothesis and uses generalized ordered logit model. In this study, the data has been obtained from Household Budget Survey in 2009 and poverty levels have been categorized in order to determine the factors affecting different levels of poverty. The findings show that middle class has approached poor classes and the gap between the rich and the middle class has widened.
- Aranz J. M. and Canto O. (2011) ‘‘Measuring The Effect of Spell Recurrence on Poverty Dynamics-Evidence from Spain’’, Journal of Economic Inequality, Vol. 9, pp .1-27.
- Bartram D. (2011) ‘‘Economic Migration and Hapiness: Comparing Immigrants and Natives Hapiness Gains from Income’’, Social Indicators Research, Vol. 103, pp.57-76.
- Bogale, A. (2011) ‘‘Analysis of Poverty and its Covariates Among Smallholder Farmers in the Eastern Hararghe Highlands of Ethiopia’’, Journal of Development and Agricultural Economics Vol. 3, No.4, pp. 157-164.
- Bustillo, Rafal, M. and Anton Hose,I. (2011) ‘‘From Rags to Riches? Immigration and Poverty in Spain’’, Population Research and Policy Review,Vol.30, No.5, pp.661-676.
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An Investigation of Small and Micro-Enterprise Owners’ Perceptions Towards Financial Credit Offered by Commercial Banks in the Cape Coast Metropolitan Area of Ghana
John K. Mbroh
This paper reports on a study conducted by collecting data from both the demand and supply sides of formal finance to understand the perceptions of each party towards the other, regarding financial credit offered by commercial banks in the Cape Coast Metropolitan Area of Ghana. The study is an empirical investigation of perceptions and attitudes respectively of the two parties and consequently the co-existence expected of them – the commercial banks, as an important source of business funding and the small and micro-enterprise owners (SMEOs), as valued customers. Findings of the study point to the fact that SMEOs, especially the unregistered ones have a very blinkered understanding of the banks’ financial credit procedures. The consequence of which, is the perceived rigid prudential measures by banks, weak locus of loan/overdraft applications and bargaining power in terms of credit quantum, interest rates and their resultant payment defaults. The banks on the other hand, would be required to do much more in terms of education on their products and procedures. In addition, their loan-repayment patterns and interest rates were found to be rigid and indiscriminate respectively and as a result, had made them unattractive to the SMEOs. The study recommends the importance of building a healthy business partnership between the two parties as a means to improve access to finance by this SME sector.
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Procedure for Creating a Virtual Multibank Agent
Lozano Carmen, Fuentes Federico
In this paper, we propose a procedure that makes it possible to create a virtual multibank agent that will assist potential banking customers in their decision making, who are demanding with respect to the level and quality of the banking services that they would like to receive, particularly when it comes to deciding to invest their savings or apply for financing for their expenses. The virtual multibank agent would act on two levels: first, it would optimize navigation through an online banking website; and secondly, it would sort through the banking information available online and refine this information in order to offer the best option among those available. Tabu search algorithms and the use of intelligent agents based on fuzzy logic by means of prior categorization are techniques that have proven to be useful in applications for the optimum distribution of information in the shortest amount of time possible, and the search for the best solution among all those available.
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Permanent Income Hypothesis, Myopia and Liquidity Constraints: A Case Study of Pakistan
Khalid Khan, Hazrat Yousaf , Muhammed Ghazanfar Abbas , Manzoor H Memon ChE, Mohammed Nishat
This paper is an attempt to test the Permanent Income Hypothesis (PIH), Myopia and Liquidity Constraints as a case study for Pakistan. The paper also attempts to find out valid reasoning incase the PIH is rejected. Hall’s random walk model (1978) and Campbell and Mankiw model (1990) are used to test for the validity of PIH. The results reject the PIH and indicate the strong validity of Absolute Income Hypothesis (AIH) in Pakistan. Accordingly, Shea (1995) model is also used to validate the rejection of the PIH. The application of Shea (1995) model confirms the rejection; the symmetric relationship between consumption and expected income and provide a little evidence of existence of liquidity constraints
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Zouheir ABIDA , Imen Mohamed SGHAIER
This paper examines the empirical relationship between economic growth and income inequality for 3 countries of North Africa (Tunisia, Morocco and Egypt) over the period 1970-2004. The results of this paper indicate that the long-run growth elasticity of income inequality is negative and significant implying that keeping other factors constant; more income inequality reduces economic growth. Moreover, this paper finds evidence that more physical and human capital investment and higher openness to trade have statistically significant impact on enhancing economic growth and reducing poverty.
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Microfinance and Poverty Reduction in Ghana. The Case of Central Region of Ghana
The study evaluated Microfinance as a tool for poverty reduction in Ghana using central region as a case study. A survey design involving quantitative, qualitative and participatory methods within the framework of impact assessment techniques was used. Simple random and stratified sampling methods were employed to select five Microfinance Institutions (MFIs) and one hundred microcredit beneficiaries. The study made use of both primary and secondary data. It was found out that though there are challenges microfinance has a positive impact on poverty reduction. Among the recommendations were that microfinance clients should be trained before and after disbursement of the loan; and also they should be effectively monitored. In addition to the above recommendations it was concluded that if the challenges facing the Microfinance sector (eg; inappropriate institutional arrangement, poor regulatory environment etc) are addressed microfinance will be a potent tool for poverty reduction not only in Ghana but all developing countries at large.
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Are Real Devaluations Contractionary? an Empirical Analysis for Pakistan
Naeem Ur Rehman Khattak, Muhammad Tariq
The failure of Bretton Woods system in 1970s diverted the attention of the researchers and policy makers from the orthodox wisdoms of elasticities, absorptions and Keynesian towards the new structuralist theories of contractionary depreciations. The present study has been carried out to test this contractionary hypothesis of real depreciations for Pakistan in the framework of a three version IS curve approach by using annual data over the period, 1973-2008. The main finding of the study is that real depreciation increases the output gap in Pakistan. The results also show that movement towards a more flexible exchange rate regimes also raises the output gap.
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An Empirical Analysis of the Excessive Volatility-Overconfidence Relationship: Evidence from the Tunisian Stock Market
Bayoudh Feker, Houfi Mohamed Ali, Tissaoui Kais, Zamouri Sana
The purpose of this paper is to provide that the explanation of excessive volatility can be only done through an attentive description of the psychological aspects of the investors. Our interest is carried in particular to the overconfidence bias. Our objective in this study is to identify whether the excessive volatility of observed stocks on the Tunisian Stock Market (TSE) results from the excessive trading of overconfident investors. The analysis of the obtained results, over the period January 1999 – October 2007, indicates quite clearly the importance of considering this bias in analysis of the specificities of Tunisian Stock Market (TSE). It appears that overconfidence admits a more pronounced effect on the volatility for daily time intervals compared to weekly and monthly intervals.The asymmetric nature of the dynamics of return volatility in response to positive and negative shocks is also checked.
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Modelling Non-Interest Income at Tunisian Banks
Abdelaziz HAKIMI, Helmi HAMDI, Mouldi DJELASSI
The aim of this paper is to analyze the determinants of the non-interest income for the Tunisian context by the use of data of 10 Tunisian deposit banks. Our sample is observed during the period 1998-2009. Using panel data estimation; our findings reveal that the information and communication technologies adoption and the banking characteristics are the main influential factors shaping the tendency of non-interest income in Tunisia.
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Variations in Prices due to Anticipated and Unanticipated Money
Biswajit Maitra, C. K. Mukhopadhyay
The relation between money and price has unique relevance in price stability. Rational expectations theorists hold that both anticipated and unanticipated money supply affect price level. This paper addresses this issue and enquires if anticipated and unanticipated money supplies have any role in the variations in whole sale and consumer prices (WPI & CPI) in India over the period 1992:Q1 to 2010:Q3. It is found that both anticipated and unanticipated money supply shocks cause rise in WPI and CPI inflation and justifying the rational expectations proposition. Price level, therefore, can be stabilized through appropriate monetary management.
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Government Deficits and Corporate Liquidity
Naiwei Chen, Siting Yo
This study examines the relationship between government deficit and corporate liquidity (cash holdings). Using data of nonfinancial firms in Taiwan from 1981 to 2009, this study finds that corporate liquidity is lower when government deficit is higher. In addition, corporate liquidity is related with other macroeconomic conditions, such as inflation, short-term interest rate, and economic growth. More precisely, results indicate that inflation and interest rates have a negative impact on corporate liquidity that is aggravated when government deficit is higher. Economic growth has a positive impact on corporate liquidity, and such positive impact is weakened when government deficit is higher.
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John K. Mbroh
The burden of cash management has become a topical issue in small businesses. To gain information on current practice, this paper examines survey evidence on cash management practices of two hundred and two small business owners (SBOs) in the Cape Coast Metropolitan Area of Ghana. It is evident in the study that majority of the SBOs studied either do not understand the attributes or the importance of cash management and as a result did not practice any formal system of the concept. The informal systems of cash management mainly practiced were found to be susceptible to cash fraud and other business growth difficulties. Some associated cash management problems have been highlighted and solutions proffered for ameliorating the situation. The paper further suggests that future research and policy directions consider gender differences and attributes as well as some industry peculiarities to the present rear growth in this important business unit.
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This paper explores the relationship between CSR Reporting and the last global economic crisis that started in the late half of the year 2007. The sample of the study is composed of companies included in the "GRI Report list 1999-2011", more specifically 2790 companies that published CSR reports during the period 2007-2011. One-way repeated measures ANOVA testing on three factors (Report Type, Application Level and Report Status) revealed that transparency and quality of the reports decreased during the years 2007, 2008 and 2011, years that have been linked with the economic crisis or economic uncertainty. Therefore, this paper supports the need to maintain Ethical and Sustainability standards during economic crisis and concludes that more than a threat, Corporations and Society in general, should approach this as an opportunity period to improve CSR-Reporting, a period in which the need for Ethic behavior and Corporate Social Responsibility is greater.
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Favorable and Unfavorable Conditions for Innovation: Some Cross Country Evidence
William R. DiPietro
The paper employs cross country regression analysis to estimate the effect of democracy and income inequality, adjusting for the level of income and other variables, on country innovation. It finds that both of these variables are of consequence for innovation. Different countries innovate at different rates. Some countries are very creative while other countries are not. Innovation is of vital importance to economic activity. The long term health of the economy depends on innovation, as creativity and innovation are the key drivers of economic growth. Understanding the determinants of creativity and innovation is, therefore, a serious endeavor. While it is common to study the reasons for differences in creativity and innovation across firms and countries by knowledge production function inputs such as dollar expenditure on research and development, looking for more fundamental underlying socio-political variables at the country level that may lead to a more favorable or less favorable environmental conditions for innovation is less common. National socio-political country conditions are not the direct determinants of innovation such as those at the firm level, but, rather, they are the behind the scenes forces influencing the development of these direct components. For instance, greater freedom and democracy may create individuals who are more autonomous, independent, and entrepreneurial. If, at the firm level, certain corporate cultural characteristics are the key to innovation, then some country characteristics will provide a more favorable milieu for their evolution and appearance, while others will not. The purpose of this paper is to focus on two socio-political variables, democracy and income inequality, as potential determinants of innovation. In pursuit of this undertaking, the paper is divided into five parts. The first part looks at potential theoretical reasons why democracy and income inequality and a few other country variables may have relevance for innovation. The second section discusses the measures that are employed in the empirical analysis and identifies data sources. The third part shows the outcomes of regression runs on innovation and democracy and on innovation and income inequality adjusting for the level of economic development and for other variables. The final section concludes.
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This paper empirically examines the dynamic causal relationships between electricity consumption and economic growth for five different panels (namely high income, upper middle income, lower middle income, low income based on World Bank income classification and global) using time series data from 1960 to 2008. Three panel unit root tests results support that both the variables are integrated of order 1 for all panels except low income panel. Only the variable economic growth is integrated of order 1 for low income panel. The Kao and Johansen Fisher panel conintegration tests results support that both the variables are cointegrated for high income, upper middle income and global panels but for lower middle income and low income panels are not cointegrated. Bidirectional causality between economic growth and electricity consumption both in the short-run and long-run is found for high income, upper middle income and global panels from the Granger causality test results. Unidirectional short-run causality is found from economic growth to electricity consumption for lower middle income panel and no causal relationship is found for low income panel. It is found that the long-run elasticity of economic growth with respect to electricity consumption is higher for high income, upper middle income and for global panels indicates that over times higher electricity consumption gives rise to more economic growth in these panels.
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