Energy Consumption and Economic Growth Nexus: New Empirical Evidence from Nigeria
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AbstractThis study analysed the trend of energy consumption, real output, financial development, monetary policy rate and consumer prices and also examined the long-run relationship and direction of causality between energy consumption and economic growth with consideration for financial development, monetary policy rate and consumer prices. These were with a view to examining the relationship between energy consumption and economic growth in Nigeria during the period 1971-2010. The result showed that all the variables used in the study are characterized by a positive trend. Also, it was found that variables followed a I(1) process. The study provides weak evidence in support of long-run relationship between energy consumption and economic growth. The study further revealed that energy consumption among other variables positively and significantly influenced output growth in the short-run. Using the first three lags, we found no causal evidence one way or two way between energy consumption and economic growth. The study concluded that energy consumption only has short-run positive impact on the economy but has not enhanced long-run economic growth in Nigeria during the period under investigation. Keywords: Error correction model; aggregated analysis; energy consumption; financial development; monetary policy rate JEL Classifications: O13; O47; Q43
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How to Cite
Abalaba, B. P., & Dada, M. A. (2013). Energy Consumption and Economic Growth Nexus: New Empirical Evidence from Nigeria. International Journal of Energy Economics and Policy, 3(4), 412–423. Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/550