Electricity consumption and economic growth in Algeria: A multivariate causality analysis in the presence of structural change |
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| Affiliation: | 1. University Paris-Est, Scientific and Technical Center for Building, Cours Louis Lumière, 94300 Vincennes, France;2. University of Béjaia, Algeria;1. Univ. Ouargla, Fac. des sciences appliquées, Lab. Promotion et valorisation des ressources sahariennes (VPRS), BP 511, Route de Ghardaïa, Ouargla 30000, Algeria;2. Univ. Sidi Bel Abbes, Fac. Technology, Department Mechanical Engineering, Lab. Matériaux et Systèmes Réactifs (LMSR), BP89, Sidi Bel Abbes 22000, Algeria;3. Department Climatic Engineering, City of Ain El Bey, 25000 Constantine, Algeria;1. International Institute of Social Studies (ISS), Erasmus University Rotterdam, The Hague, the Netherlands;2. National Higher School of Statistics and Applied Economics (ENSSEA), Koléa, Algeria;1. University of Mostaganem, Department of Economics, Algeria;2. University Paris-Est, IFSTTAR, AME-DEST, France;1. Faculty of Economics and Administrative Sciences, Department of Economics, Osmaniye Korkut Ata University, 80000, Merkez, Osmaniye, Turkey;2. Faculty of Tourism, Anadolu University, 26470, Tepebasi, Eskisehir, Turkey;1. Faculty of Economics and Administrative Sciences, Department of Management Information Systems, Korkut Ata University, 80000, Merkez, Osmaniye, Turkey;2. Faculty of Economics and Administrative Sciences, Department of Economics, Osmaniye Korkut Ata University, 80000, Merkez, Osmaniye, Turkey |
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| Abstract: | This article addresses the issue of electricity consumption, petroleum price and economic growth in Algeria. The primary objective is to investigate and analyze the causal relationship between electricity consumption (EC), Brent oil price (BOP) and economic growth (GDP) for Algeria over the period of 1971–2010. To examine short-run, long-run and joint causality relationships we used a multivariate cointegration approach based on the recent advances in time series econometrics (e.g., Zivot–Andrews test; Gregory–Hansen cointegration test; Vector Error Correction Models (VECM)). The empirical results show that there is evidence of short-run and a strong long-run bi-directional causal relationship between EC and real GDP in Algeria. Findings indicate also the absence of causal relationship between BOP and EC. Our empirical findings support the idea that there a link between electricity consumption and economic growth and disproves the neo-classical assumption referred to as the “neutrality hypothesis”. |
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