Dossou Toyo Amegnonna Marcel, PhD Сandidate, School of Economics, Southwestern University of Finance and Economics, China
This paper summarizes the arguments and counterarguments within the scientific discussion on the impact of electricity consumption in developing country especially in the Republic of Benin. The main purpose of the research is to examine the causal relationship between electricity consumption and economic growth in the Republic of Benin over the period 1971-2014. Systematization literary sources and approaches for solving the problem using Stationary test, the Johansen cointegration test, the vector autoregressive (VAR) model, and Granger causality test were used as econometric approach. The relevance of the decision of this scientific problem is that the electricity consumption may growth the Economy of the country. Methodological tools of the research methods were the results of 43 years of research on modeling. The object of research is to examine the impact of the electricity consumption in the economy growth in the Republic of Benin. The research empirically confirms and theoretically proves that there is bidirectional causality running from electricity consumption and economic growth. The results of the research can be useful for the government to invest more in energy to attract more foreign investors to boost the economy and to alleviate the poverty through reducing unemployment rate. In addition the causal relationship between energy consumption and economic growth in theRepublic of Benin represents a wildly studied topic in energy economic literature. Energy play a crucial role in the economics of the both developed and developing countries. The growth hypothesis suggest that energy consumption is an indispensable component in growth, directly and directly as complement to capital and labor as an input in the production process.
Keywords: economic growth, Granger causality, electricity consumption, VAR.
JEL Classification: Q43, C32.
Cite as: Marcel, D.T.A. (2019). Electricity Consumption and Economic Growth Nexus in the Republic of Benin. SocioEconomic Challenges, 3(2), 63-69. http://doi.org/10.21272/sec.3(2).63-69.2019.
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