Linking energy consumption with economic growth: Rwanda as a case study

Titolo Rivista ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT
Autori/Curatori Gerard Bikorimana, Charles Rutikanga, Didier Mwizerwa
Anno di pubblicazione 2021 Fascicolo 2020/2
Lingua Inglese Numero pagine 20 P. 181-200 Dimensione file 410 KB
DOI 10.3280/EFE2020-002008
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This paper analyzes the link between energy consumption and economic growth in Rwanda for the period 1985-2017. The ARDL bounds test was used to test for the existence of co-integration, while the Toda and Yamamoto granger causality test was applied to test for causal direction. The results from the estimation of the ARDL bounds test showed that there was no evidence of co-integration between the considered variables under study. Additionally, the empirical findings confirmed that there was no relationship between economic growth and energy consumption in Rwanda. The findings supported the "neutrality hypothesis" between energy consumption and economic growth. This implies that neither conservative nor expansive policies in relation to energy consumption have any effect on economic growth. Furthermore, the study found a uni-directional granger causality running from energy consumption to economic growth. The results of this findings are consistent with the "growth hypothesis" which postulates that energy consumption leads to economic growth

Keywords:Energy consumption, economic growth, causality, co-integration, Rwanda

Jel codes:C22, Q43, O13, O55

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Gerard Bikorimana, Charles Rutikanga, Didier Mwizerwa, Linking energy consumption with economic growth: Rwanda as a case study in "ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT" 2/2020, pp 181-200, DOI: 10.3280/EFE2020-002008