Title: The interaction of energy consumption and economic growth in South Africa: assessment from the bounds testing approach
Authors: Tafirenyika Sunde
Addresses: Department of Accounting Economics and Finance, Namibia University of Science and Technology, Private Bag 13388, Windhoek, Namibia
Abstract: The article empirically examined the causal interactions between energy consumption and economic growth in South Africa for the period 1970 to 2015 using the ARDL-bounds testing method. The article found a positive long-run cointegrating relationship between real economic growth and energy consumption in South Africa. In addition, the research found that although there is unidirectional causality running from energy consumption to economic growth in the short-run, there is long-run bidirectional causality between the two variables as indicated by the coefficients of the error correction terms which were negative and significant as predicted by theory. This means that reducing energy consumption adversely affect real economic growth in both the short- and the long-run; thus, South Africa should adopt a more vigorous energy policy.
Keywords: energy consumption; economic growth; financial development; trade openness; ARDL; error-correction model; South Africa.
International Journal of Sustainable Economy, 2018 Vol.10 No.2, pp.170 - 183
Received: 20 Jun 2017
Accepted: 16 Oct 2017
Published online: 13 Dec 2017 *