Authors retain ownership of the copyright for their content.
THE CAUSAL RELATIONSHIP BETWEEN GDP, ENERGY CONSUMPTION, POPULATION, AND OIL PRICE: EVIDENCE FROM VIETNAM
Corresponding Author(s) : Phuoc Thien Nguyen
Humanities & Social Sciences Reviews,
Vol. 7 No. 2 (2019): March
Purpose of this study: This study aims to examine the relationship between energy consumption, gross domestic product, and population for the period of 1985-2015.
Methodology: The research questions for this study are as follows: (1) What is the association among energy consumption, GDP, population, and oil price? (2) Which suggestions can be provided on the basis of the research findings? Unit root test, co-integration test, VECM model, and Granger causality are employed to analyze the association among the aforementioned variables.
Main Findings: Firstly, the results show the existence of co-integration among the variables. By employing the Granger causality, the research findings demonstrate a unidirectional causality running from population to energy consumption, a unidirectional causality running from energy consumption to gross domestic product, and a unidirectional causality running from population to gross domestic product.
Implications: With these results, it is suggested that Vietnam should promote the growth of the population and the energy policies to generate economic growth.
Novelty: To the best of our knowledge, this study extends the scarce literature that provides empirical findings regarding this issue.
Download CitationEndnote/Zotero/Mendeley (RIS)
- Aqeel, A., & Butt, M. S. (2001). The relationship between energy consumption and economic growth in Pakistan. Asia-Pacific Development Journal, 8(2), 101-110.
- Bekhet, H. A., & Yusop, N. Y. M. (2009). Assessing the relationship between oil prices, energy consumption and macroeconomic performance in Malaysia: co-integration and vector error correction model (VECM) approach. International Business Research, 2(3), 152.
- Binh, P. T. (2011). Energy consumption and economic growth in Vietnam: threshold cointegration and causality analysis. International Journal of Energy Economics and Policy, 1(1), 1-17.
- Canh, L. Q. (2011). Electricity consumption and economic growth in Vietnam: A cointegration and causality analysis. Journal of Economic Development, 13, 24-36.
- Chontanawat, J., Hunt, L. C., & Pierse, R. (2008). Does energy consumption cause economic growth?: Evidence from a systematic study of over 100 countries. Journal of Policy Modeling, 30(2), 209-220.
- Do, T. M., & Sharma, D. (2011). Vietnam's energy sector: A review of current energy policies and strategies. Energy Policy, 39(10), 5770-5777.
- Energy Information Administration (2010). International Petroleum Monthly. February Retrieved from https://www.eia.gov/consumption/data.cfm
- Engle, R. F., & Granger, C. W. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica: Journal of the Econometric Society, 251-276.
- Granger, C. W. (1988). Some recent development in a concept of causality. Journal of econometrics, 39(1), 199-211.
- Gujarati, D. N. (2004). Basic Econometric. (4 Ed.).
- Islam, F., Shahbaz, M., Ahmed, A. U., & Alam, M. M. (2013). Financial development and energy consumption nexus in Malaysia: A multivariate time series analysis. Economic Modelling, 30, 435-441.
- Le, V. T., & Vinh, N. T. (2011). The impact of oil prices, real effective exchange rate and inflation on economic activity: Novel evidence for Vietnam (No. DP2011-09). Research Institute for Economics & Business Administration, Kobe University.
- Lee, C., Chang, C., Chen, P., 2008. Energy-income causality in OECD countries revisited: the key role of capital stock. Energy Economics, 30, 2359–2373.
- Loi, N. D. (2012). Energy consumption and economic development: Granger causality analysis for Vietnam. Vietnam development and policies research centre (DEPOCEN) .Working paper No.14.
- Mahadevan, R., & Asafu-Adjaye, J. (2007). Energy consumption, economic growth and prices: A reassessment using panel VECM for developed and developing countries. Energy Policy, 35(4), 2481-2490.
- Mulugeta, S. K., Nondo, C., Schaeffer, P. V., & Gebremedhin, T. G. (2010). Does level of income matter in the energy Consumption and GDP Nexus: Evidence from Sub-Saharan African Countries. Research Paper, 7, 2252-2256.
- Narayan, P. K., Narayan, S., & Popp, S., (2010) Does electricity consumption Granger cause GDP? New global evidence. Applied Energy, 87, 3294-3298.
- Ozturk, I. (2010). A literature survey on energy–growth nexus. Energy policy, 38(1), 340-349.
- Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica 1989; 57, 1361–401.
- Sargan, J. D. (1964). Three-stage least-squares and full maximum likelihood estimates. Econometrica: Journal of the Econometric Society, 77-81.
- Schwert, G. W. (1989). Margin requirements and stock volatility. Journal of Financial Services Research, 3(2), 153-164.
- Soytas, U., & Sari, R. (2003). Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Economics, 25(1), 33-37.
- Tang, C. F., Tan, B. W., & Ozturk, I. (2015). Energy consumption and economic growth in Vietnam. Renewable and Sustainable Energy Reviews, 54, 1506-1514.
- Toan, P. K., Bao, N. M., & Dieu, N. H. (2011). Energy supply, demand, and policy in Viet Nam, with future projections. Energy Policy, 39(11), 6814-6826.
- Tupe, Sanjay & Narayan. (2007). An empirical study nexus between economic growth and energy consumption: A causality-co-integration testing for India 1971-2004.
- Verbeek, M. (2008). A guide to modern econometrics. John Wiley & Sons.