Title: Nexus between energy consumption, health expenditure and economic growth in Australia

Authors: Ronald Ravinesh Kumar; Peter Josef Stauvermann; Syed Jawad Hussain Shahzad

Addresses: Informetrics Research Group; Faculty of Social Sciences and Humanities, Ton Duc Thang University, Ho Chi Minh City, Vietnam ' Department of Global Business and Economics, Changwon National University, Changwon, South Korea ' Montpellier Business School, Montpellier, France

Abstract: Focussing on Australia, we examine the effects of energy consumption and health expenditure on output within the extended neo-classical Solow growth model. We use the ARDL bounds and non-Granger causality procedures for a sample period 1971-2014, to analyse the short-run and long-run effects of energy consumption and health expenditure on economic growth. Additionally, we examine the threshold values of energy and health expenditure. It is noted that in the long-run, energy consumption vis-à-vis output has a U-shaped relationship and the health expenditure has an inverted U-shaped relationship. The minimum energy consumption per capita necessary for growth needs to be at least 4,849 kilograms of oil equivalent, whereas the maximum amount of health expenditure, in real terms, should not exceed AU$ 5,959 per person. In terms of causality, we note a unidirectional causality from income, capital stock (investment) and health expenditure to energy consumption; and bidirectional causality between health expenditure and income. [Received: March 23, 2018; Accepted: November 18, 2018]

Keywords: energy consumption; health expenditure; economic growth; nonlinear; Australia.

DOI: 10.1504/IJOGCT.2020.108053

International Journal of Oil, Gas and Coal Technology, 2020 Vol.24 No.4, pp.543 - 572

Received: 23 Mar 2018
Accepted: 18 Nov 2018
Published online: 02 Jul 2020 *

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