Temporal causality between energy consumption and income in six Asian emerging countries

Rafiq, Shuddhasattwa and Salim, Ruhul A. (2009) Temporal causality between energy consumption and income in six Asian emerging countries. Applied Economics Quarterly, 55 (4). pp. 335-350. ISSN 1611-6607


This article examines the short- and long-run causal relationship between energy consumption and GDP of six emerging economies of Asia. Based on cointegration and vector error correction modeling the empirical results show that there exists a unidirectional short- and long-run causality running from energy consumption to GDP for China, a unidirectional short-run causality from output to energy consumption for India, whilst a bi-directional short-run causality for Thailand. Neutrality between energy consumption and income is found for Indonesia, Malaysia and Philippines. Following causality results India may contribute to the fight against global warming directly implementing energy conservation measures. For China, where causality runs from energy consumption to output, the country should focus on technological developments and mitigation policies. Since a bi-directional causality is found in Thailand, a balanced combination of alternative policies seems to be appropriate. Nevertheless, all the countries may initiate environmental policies aimed at decreasing energy intensity, increasing energy efficiency, developing a market for emission trading.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: This article can be viewed upon request from Shuddhasattwa.Rafiq@usq.edu.au
Faculty / Department / School: Historic - Faculty of Business - No Department
Date Deposited: 31 Jul 2010 02:43
Last Modified: 24 Jan 2018 05:34
Uncontrolled Keywords: energy conservation; cointegration; error correction model; generalized variance decompositions; generalized impulse response functions
Fields of Research : 14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
16 Studies in Human Society > 1606 Political Science > 160605 Environmental Politics
14 Economics > 1499 Other Economics > 149902 Ecological Economics
Socio-Economic Objective: B Economic Development > 91 Economic Framework > 9101 Macroeconomics > 910103 Economic Growth
URI: http://eprints.usq.edu.au/id/eprint/7295

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