Journal
ENERGY ECONOMICS
Volume 29, Issue 6, Pages 1141-1150Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.eneco.2006.05.018
Keywords
Fiji; bounds testing approach to cointegration; Granger causality
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Fiji is a small open island economy dependent on energy for its growth and development; hence, the relationship between energy consumption and economic growth is crucial for Fiji's development. In this paper, we investigate the nexus between electricity consumption and economic growth for Fiji within a multivariate framework through including the labour force variable. We use the bounds testing approach to cointegration and find that electricity consumption, GDP and labour force are only cointegrated when GDP is the endogenous variable. We use the Granger causality F-test and find that in the long-run causality runs from electricity consumption and tabour force to GDP, implying that Fiji is an energy dependent country and thus energy conservation policies will have an adverse effect on Fiji's economic growth. (c) 2006 Elsevier B.V. All rights reserved.
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