The Relationship between Economic Growth and Energy Consumption Disaggregated by Sector: The Case of Morocco

Abstract

The type of relationship that can link energy with economic growth plays a major role in determining the macroeconomic policy of a country. Therefore, several studies have been carried out to derive econometric models to link energy consumption with gross domestic product (GDP). However, in these studies the energy consumption has been used in its global term, while this consumption includes all the economic sectors that use energy (residential, industry, transport, agriculture). Therefore, the objective of this work is to examine this relationship between the gross domestic product (GDP) and energy consumption but disaggregated by sector (residential, transport and industrial). And to validate our model we have taken the case of Morocco during the period 1997-2019, in order to draw the impact of each sector on economic growth. In order to test this causality, a Vector Error Correction Model (VECM) is applied instead of a Vector Autoregressive Model (VAR), using the Johansen cointegration technique. The results obtained showed that in the long run energy consumption by the transportation and residential sectors has a positive impact on GDP, while that of households has a negative impact.

The Impact of Renewable and Non-Renewable Energy Consumption on Aggregate Output in Pakistan: Robust Evidence from the RALS Cointegration Test

“…Additionally, Moussavou (2022) found that electricity consumption has a bidirectional long-run causality with economic growth and a unidirectional long-run causality between energy consumption and capital stock. The Granger causality relationships between GDP and energy consumption were confirmed by Tatou et al (2023), with labour and capital causing GDP and energy consumption. Finally, Lee et al (2022) demonstrated that energy consumption, capital and labour positively influence manufacturing production individually and simultaneously.…”

“…Recent empirical studies show that the use of non-renewable energy promotes economic growth (Sek, 2017;Nawaz et al, 2021;de Oliveira & Moutinho, 2022;Tatou et al, 2023) but also impair environmental quality in the form of higher CO2 emissions and other hazardous gases (Bhat, 2018;Adedoyin et al, 2021;Asif et al, 2021;Karaaslan & Çamkaya, 2022;Solaymani et al, 2023). Conversely, the use of renewable energy improves environmental quality and mitigates CO 2 emissions (Ito, 2016;Adedoyin et al, 2021;Banga et al, 2022;Deka et al, 2022).…”

The Impact of Renewable and Non-Renewable Energy Consumption on Aggregate Output in Pakistan: Robust Evidence from the RALS Cointegration Test

“…The relationship between gross domestic product (GDP) and energy consumption varies depending on the context, such as the country-level analysis, regional/sectoral analysis, the type of energy used, the income level, etc. Some empirical studies have found a positive relationship between energy consumption and GDP, suggesting that increased energy consumption can contribute to economic growth (Sek, 2017;Abbas, 2020;Andrieu et al, 2022;Zafirova & Angelova, 2022;Tatou et al, 2023). Similarly, Bulut & Apergis (2021) concluded that solar energy consumption has a positive impact on the GDP of the United States.…”

“…In addition, Khan and Kong (2020) and Tatou et al (2023) found that the energy consumption of the transportation and residential sectors has a positive impact on GDP, while the energy consumption of households in Morocco has a negative impact on GDP. Tran et al (2022) discovered that GDP in the Czech Republic, Hungary and Slovakia is granger-caused by energy consumption, suggesting that energy consumption can drive economic growth.…”