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Exploring the effects of energy consumption on output per worker: a study of Albania, Bulgaria, Hungary and Romania

Kumar, Ronald R. and Stauvermann, P.J. and Patel, Arvind and Kumar, Radika D. (2014) Exploring the effects of energy consumption on output per worker: a study of Albania, Bulgaria, Hungary and Romania. Energy Policy, 69 . pp. 575-585. ISSN 0301-4215

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Abstract

In this article, we explore the long-run cointegration between output, capital and energy consumption, in per worker terms, for Albania, Bulgaria, Hungary and Romania. We use the augmented Solow (1956) model and the ARDL bounds procedure (Pesaran et al., 2001) to examine the short-run and long-run effects of energy and capital on output (in per worker terms). We also conduct causality test using the Toda and Yamamoto (1995) non-causality procedure. Our results show the existence of long-run cointegration between output per worker and energy per worker for all the four countries. We find that energy per worker have a dynamic short-run positive effect in Albania (0.37%), Bulgaria (0.25%), Hungary (0.36%) and Romania (0.68%), and a long-run positive effect in Bulgaria (0.32%) and Romania (0.63%) which duly indicate that energy consumption has a momentous long-run effect in these two countries. The causality results indicate a unidirectional causation from output per worker to energy per worker for all the four countries, and from capital per worker to energy per worker for Albania and Romania. Consequently, a balance between effective energy consumption and sound energy conservation policies are likely to support economic growth in the four countries.

Item Type: Journal Article
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: Faculty of Business and Economics (FBE) > School of Accounting and Finance
Depositing User: Ronald Kumar
Date Deposited: 27 May 2014 16:46
Last Modified: 21 Sep 2016 16:16
URI: http://repository.usp.ac.fj/id/eprint/7412
UNSPECIFIED

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