Title: Causality between electricity consumption and economic growth: empirical evidence from India

Authors: Lopamudra Mishra

Addresses: P.G. Department of Economics, Sambalpur University, Jyoti Vihar, Sambalpur, Odisha-768019, India

Abstract: The present paper tries to examine the Granger causality between per capita electricity consumption and per capita gross domestic product (GDP) at 2004-2005 prices for India using annual data covering the period 1970-1971 to 2015-2016. It applies error-correction model to examine the causal relationship between these two variables. The estimated results indicate that the per capita real GDP and per capita electricity consumption are co-integrated and there is unidirectional Granger causality running from real GDP to electricity consumption but not vice-versa. In the short run, the results of the causality test show that bidirectional causality flow from economic growth to electricity consumption in India. Thus the Government of India has to face the numerous energy challenges in the future.

Keywords: electricity consumption; GDP; causality; error-correction model; India.

DOI: 10.1504/IJICBM.2018.095676

International Journal of Indian Culture and Business Management, 2018 Vol.17 No.4, pp.417 - 427

Received: 11 Sep 2017
Accepted: 05 Apr 2018

Published online: 16 Oct 2018 *

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