Energy Consumption, Energy Prices and Economic Growth: Causal Relationships Based on Error Correction Model

Authors

  • Augustine C. Osigwe Nigerian Institute of Social and Economic Research (NISER) Surveillance and Forecasting Department Ojoo, Ibadan, Oyo State, Nigeria
  • Damilola Felix Arawomo Nigerian Institute of Social and Economic Research (NISER) Surveillance and Forecasting Department Ojoo, Ibadan, Oyo State, Nigeria

Abstract

This study examined the Granger causality of energy consumption, oil price and economic growth in Nigeria. Two sub-categories of energy (kerosene and electricity) were equally considered. The error correction model framework was used to test the granger causality of the variables. The results for the total energy showed bidirectional causality between energy consumption and economic growth. As regards electricity, bidirectional causality was found between electricity consumption and economic growth as well as between electricity consumption and electricity price. No causal relationship exists among kerosene consumption, kerosene price and economic growth. Based on our findings, we recommend that policies that promote energy consumption and economic growth be introduced. One way of achieving this is through the adoption of appropriate energy pricing framework that takes cognisance of both the present and the future generation. Keywords: Energy consumption; Economic Growth; Kerosene Consumption; Electricity Consumption. JEL Classifications: C22; Q43; Q48

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Author Biographies

Augustine C. Osigwe, Nigerian Institute of Social and Economic Research (NISER) Surveillance and Forecasting Department Ojoo, Ibadan, Oyo State, Nigeria

Augustine C. Osigwe is a Research Fellow in Nigerian Institute of Social and Economic Research (NISER). 

Damilola Felix Arawomo, Nigerian Institute of Social and Economic Research (NISER) Surveillance and Forecasting Department Ojoo, Ibadan, Oyo State, Nigeria

Damilola Feix Arawomo is a Research Fellow in Nigerian Institute of Social and Economic Research (NISER). Just Defended his Ph.D thesis in the Department of Economics, Univesity of Ibadan, Nigeria. He has a number of Schorlarly journals 

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Published

2015-04-16

How to Cite

Osigwe, A. C., & Arawomo, D. F. (2015). Energy Consumption, Energy Prices and Economic Growth: Causal Relationships Based on Error Correction Model. International Journal of Energy Economics and Policy, 5(2), 408–412. Retrieved from https://econjournals.com./index.php/ijeep/article/view/1022

Issue

Vol. 5 No. 2 (2015)

Section

Articles

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