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- On the Global Energy Consumption and Economic Growth Nexus: a Long Time Span AnalysisPublication . Marques, Luís Miguel; Fuinhas, José Alberto; Marques, António CardosoThere is plenty of research on the energy-growth nexus for individual countries and panels of countries, but none at a global level. For this reason, this paper aims to provide important information for energy policymakers. The global energy consumption and economic growth nexus was analyzed by using an annual time series from 1965 to 2013. An auto-regressive distributed lag (ARDL) approach was followed in the presence of permanent shocks (structural breaks). The ARDL bounds test, as well as both short- and long-run elasticities, was performed. Performing the Johansen co-integration and the Toda and Yamamoto causality testing procedure gives robustness to the results. The results suggest that there is bi-directional causality between energy consumption and growth, both in the short- and long-run. High and positive long-run elasticities were found. Accordingly, conservation policies on energy could reduce economic growth on a worldwide scale. In addition, policies could begin to have a cyclical effect, given that there is bidirectional causality between energy consumption and economic growth.
- Interactions between electricity generation sources and economic activity in two Nord Pool systemsPublication . Afonso, Tiago Lopes; Marques, António Cardoso; Fuinhas, José Alberto; Saldanha, Marco Aurélio ManoThe interactions between electricity sources and industrial production in Estonia and Sweden are analysed based on monthly data. The availability of data defines the time spans from January 2010 to September 2015 for Sweden and from April 2010 to December 2014 for Estonia. These countries are particularly interesting to study because of their dissimilar generation mix. Estonia’s generation mix is based on oil shale, while Sweden’s is based on nuclear plants and hydroelectricity. In short, both countries’ energy mixes are based on endogenous natural resources. The ARDL model was applied, allowing the long-run and short-run effects to be captured. The results prove that economic growth is sustained by natural endogenous resources. Estonia should continue to improve the usage of renewable energies, using fossil sources in support, in order to reduce emissions and to meet international environmental commitments. Sweden should promote the efficient usage of various renewable sources.
- Ordinary and Special Regimes of electricity generation in Spain: How they interact with economic activityPublication . Marques, António Cardoso; Fuinhas, José Alberto; Neves, Sónia AlmeidaThe purpose of this paper is to review the literature focused on the energy/electricity-growth nexus, highlighting how the focus has shifted from aggregated energy/electricity consumption towards specific energy sources. Moreover, it aims to shed light on the relationships between different energy/electricity sources and economic growth. Empirically, the paper focuses on the analysis of interactions between electricity generation in Spain under both the Special Regime (SR) and the Ordinary Regime (OR), and their relationship with economic activity. Data for Spain is studied for a time span from January 2003 to January 2016. The Toda-Yamamoto causality test is carried out to check for causality relationships. Additionally, both short- and long-run effects are assessed by using the ARDL bounds test approach. Overall, the results reveal high internal consistency when comparing the ARDL results with the causality analysis. The substitution effect was detected between OR and SR. However, the negative effect of the SR on economic activity deserves special attention by energy policymakers.This paper argues that the main challenge of renewable sources for policymakers is their cost-effectiveness.
- Rentierism, energy and economic growth: The case of Algeria and Egypt (1965–2010)Publication . Fuinhas, José Alberto; Marques, António CardosoThe Algerian economy is an example of a high level of rentierism, while the Egyptian economy shows a low/moderate level of rentierism. The ARDL bounds test approach was used upon annual time series data from 1965 to 2010. The results suggest cointegration for both countries. Bi-causality between energy consumption and growth in the long run was found. For Algeria there is a reversed (negative) energy-growth nexus, adding a new relationship to the traditional four causal hypotheses on the energy-growth nexus. For Egypt, we found positive elasticity both of oil price and energy, which is in line with the mainstream.
- Renewable vs non-renewable electricity and the industrial production nexus: Evidence from an ARDL bounds test approach for GreecePublication . Marques, António Cardoso; Fuinhas, José Alberto; Menegaki, Angeliki N.This paper uses monthly data from Aug. 2004 to Feb. 2014 and employs the Autoregressive Distributed Lag bounds test approach to study the short and long-run relationship of renewable and non-renewable electricity with economic growth in Greece. Dummies reveal most of the major energy policy adaptations taking place in Greece to overcome the economic crisis and reach stipulated renewable energy targets. Results show that in the short-run, fossil sources play the baseload role in electricity production and there is a clear substitution effect between sources, while in the long-run, fossil sources contribute to the development of renewable energy sources as backup energy.
- Energy consumption and economic growth nexus in Portugal, Italy, Greece, Spain and TurkeyPublication . Fuinhas, José Alberto; Marques, António CardosoThe paper examines the nexus between primary energy consumption and growth in Portugal, Italy, Greece, Spain and Turkey (PIGST), with annual time series data, from 1965 to 2009. PIGST are southern European economies which have experienced several episodes that make them of particular interest to the study of periods of economic expansion and stagnation. An ARDL bounds test approach is a suitable technique to examine energy-growth nexus, within the context of countries with both sporadic shocks (outliers) and permanent shocks (structural breaks). Empirical results suggest bidirectional causality between energy and growth in both the long-run and short-run, supporting the feedback hypothesis. The results reveal themselves to be robust to panel framework. An energy conservation policy will reduce GDP growth, while a saving phenomenon is observed, since one additional unit of product requires less than one unit of energy.
- An ARDL Approach to the Oil and Growth NexusPublication . Fuinhas, José Alberto; Marques, António CardosoIn the literature, the causal relationship between oil consumption and economic growth has been poorly studied. Portugal is a medium-sized economy, which has experienced several episodes that make it of particular interest in the study of periods of economic expansion and stagnation. Portugal is constrained by external energy dependency and, due to international commitments, it is also faced with energy preservation policies that may have deep implications to its economic growth. This article examines the causal nexus between economic growth and oil consumption in Portugal, using the ARDL bounds test approach with annual time series data from 1965 to 2009. Results suggest that oil consumption causes growth in the long run and short run, and growth causes oil consumption in the long run and short run. Therefore, an energy policy that reduces oil consumption puts a slight constraint on gross domestic product growth, but growth strongly contributes to heightening Portugal’s oil dependence.
- Are Natural Resources and Apartheid Playing a Relevant Role in the Energy-Growth Nexus in South Africa?Publication . Fuinhas, José Alberto; Marques, António CardosoThe energy-growth nexus is studied in South Africa, by using a technique able to capture both short and long-run phenomena, the Auto Regressive Distributed Lag (ARDL). Annual time series data from 1965 to 2011 was used. It is proved that the prices of natural resources have a positive effect on economic growth. The influence of the end of apartheid on the energy–growth nexus began soon after the end of the regime (1990). The dual effect of energy on growth, positive in the short run, and negative in the long run, is proved and discussed.
- Electricity generation mix and economic growth: what role is being played by nuclear sources and carbon dioxide emissions in France?Publication . Marques, António Cardoso; Fuinhas, José Alberto; Nunes, André Francisco RoqueThe gradual trend towards the electrification of economies has raised new challenges. Focusing on France, this paper uses monthly data from January 2010 to November 2014, to study the challenge of the simultaneous integration of various sources of generation, and their relationship with economic growth. For the analysis of the dynamics of interaction between electricity sources, the auto-regressive distributed lag(ARDL) bounds test approach was shown to be appropriate, as it allows short-and long-run effects to be distinguished. The results showed that nuclear energy has been a huge driver of economic growth in France and, at the same time, leads to an environment with lower CO2 emissions. Renewables were shown to exert a negative effect on economic growth, which could be due to lack of investment in other sources of production, due to the resilient position held by nuclear sources. The substitution effect among sources is noticeable. The robustness of the results was checked using annual