Relationship between energy consumption and economic growth in South Africa : evidence from the bootstrap rolling-window approach
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Date
Authors
Dlamini, Janneke
Balcilar, Mehmet
Gupta, Rangan
Inglesi-Lotz, Roula
Journal Title
Journal ISSN
Volume Title
Publisher
Taylor and Francis
Abstract
This article examines the relationship between energy consumption (EC) and economic growth for
South Africa for the period 1971–2009. Most studies examining this relationship do assume that it
remains constant through the years; however, the reality might be different since many factors can
affect the existence and direction of this causality. This article looks at a bivariate vector
autoregressive process and takes into consideration any instability in the model using bootstrap rolling
Granger non-causality tests. Full-sample Granger causality tests report no causal relationship between
the two variables. Moreover, parameter stability tests detect instability in the model which means that
the full-sample Granger causality results are not valid. We therefore allow for the possibility of
structural breaks by using bootstrap rolling-window Granger causality tests. Although our results are
not very strong, we do however find a sub-period from 1987 to 1989 where EC has a causal effect on
gross domestic product growth. Except for this brief sub-period, the results show no linkage between
economic growth and EC.
Description
Keywords
Bootstrapping, Causality, Economic growth, Rolling window, South Africa (SA), Energy consumption (EC)
Sustainable Development Goals
Citation
Janneke Dlamini, Mehmet Balcilar, Rangan Gupta & Roula Inglesi-Lotz
(2016) Relationship between energy consumption and economic growth in South Africa:Evidence from the bootstrap rolling-window approach, Energy Sources, Part B: Economics, Planning, and Policy, 11:7, 617-625, DOI:10.1080/15567249.2013.843618.