Revisiting Energy-GDP Nexus for the Selected Countries of the Middle East Region

Document Type : Research Paper

Authors

1 M.A. of Economics, Islamic Azad University, Central Tehran Branch

2 Assistant Professor; Islamic Azad University, Central Tehran Branch

Abstract

This paper investigates the relationship between total energy consumption and GDP in six countries of the Middle East , including Iran,Pakistan,Saudi Arabia,Oman,Bahrain and the United Arab Emirates. The data are annual and spanning the period 1980-2012.We employed Hsiao’s (1981) methodology to examine causality relation between total energy consumption and GDP.The empirical findings show a unidirectional causality relation between total energy consumption and GDP for Iran running from energy to GDP,and supports the growth hypothesis for Iran. For Saudi Arabia there is a unidirectional causality running from GDP to total energy consumption. Therefore we can accept conservation hypothesis about Saudi Arabia.There is bidirectional causality relation for other countries which support the feedback hypothesis about them.

Keywords

References

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8- Glasure, Y.U., Lee, A.R., (1997). Cointegration, error correction and the relationship between GDP and energy: the case of South Korea and Singapore. Resource and Energy Economics 20, 17–25.
9- Gudarzi,.F.,Soheli Ghasemi.,B,.(2012).Relatioship between Energy Consumption and GDP in Iran.Journal of Energy Technologies and Policy 2,34-38
10- Hondroyianais, G., Lolos, S., Papapetrou, E., (2002). Energy consumption and economic growth assessing the evidence from Greece. Energy Economics 24, 319–336.
11- Hsiao, C., (1981). Autoregressive modeling and money income causality detection. J. Mon. Econ. 7,85-106
12- Kraft, J., Kraft, A., (1978). On the relation ship between energy and GNP. Journal of Energy Development 3, 401–403
13-Lee, C.C., (2005). Energy consumption and GDP in developing countries: a cointegrated panel analysis. Energy Economics 27, 415–427.
14- Lee, C.C., (2006). The causality relationship between energy consumption and GDP in G-11 countries revisited. Energy Policy 34, 1086–1093.
15- Lise, W., Montfort, K.V., (2007). Energy consumption and GDP in Turkey: is there a co-integration relationship? Energy Economics 29, 1166–1178.
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17- Mehrara, M., (2007). Energy consumption and economic growth: the case of oil exporting countries. Energy Policy 35 (5), 2939–2945.
18- Narayan,P.K.,Nayayan.,S.,Popp.,S.,(2010). A note on the long-run elasticities from the energy consumption–GDP relationship. Applied Energy 87, 1054–1057
19- Reynolds,. DB, Kolodziej, M.,(2008). Former Soviet Union energy consumption and GDP decline: Granger causality and the multi-cycle Hubbert curve.
Iranian Economic Review
Volume 18, Issue 3 - Serial Number 3
October 2014
Pages 103-113

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