The present study investigated the output, energy and pollution nexus hypothesis in the context o... more The present study investigated the output, energy and pollution nexus hypothesis in the context of India. The study used the annual time series data for the period 1970-2010. The empirical findings of the study show that there is a high pairwise correlation exist between energy consumption and economic growth. The cointegration result suggests that there is a long-run equilibrium relationship exist between energy consumption, economic growth and CO2 emissions. The vector error correction result shows a positive and significant impact of energy consumption on CO2 emission. The result also reveals that economic growth has a positive and significant impact on energy consumption. Due to 1% increase in economic growth, it will increase the energy consumption 60% at the 5% level of significance. The Toda-Yamamoto Granger causality result indicates there is unidirectional causality running from energy consumption to carbon emission and economic growth to carbon emission.
This article investigates the existence of a threshold level of inflation and
how any such level ... more This article investigates the existence of a threshold level of inflation and how any such level affects the growth of Indian economy. The article also seeks to examine the dynamic short-run and long-run relationship between inflation and economic growth in India. By employing spline regression method to estimate the threshold level of inflation and the long-run and short-run relationships, the results show a statistically significant structural break in the relationship between inflation and economic growth at 4 per cent. The study suggests that if inflation exceeds the threshold point, that is, 4 per cent, it will negatively affect economic growth. The autoregressive distributed lag (ARDL) bound testing cointegration model suggests that there are two cointegration vectors when gross domestic product and rate of interest are considered as the dependent variables. This result confirms the existence of the long-run equilibrium relationship between economic growth, inflation, exchange rate and rate of interest. From the long-run analysis, the study found that inflation is positively related to economic growth, whereas the other variables are not significant.
This study examines the relationship between financial development and economic growth in India a... more This study examines the relationship between financial development and economic growth in India after the reform. The present study used monthly data from the period January 1994 to December 2011. The empirical result found that there exist two cointegrating equations and the Vector Error Correction Result shows that in the long run the stock market is affecting economic growth negatively but the increase of bank credit affects the economy positively. The result also found that money supply has negative impact on economic growth in the long run, whereas, tread openness has no impact on economic growth in the long run. From the policy implication point of view the study suggest that the evolution of financial sector tends to or is more likely to stimulate and promote economic growth when monetary authorities adopt liberalised and openness policies, to improve the size of the market intone with the macroeconomic stability.
This study investigated the impact of inflation on economic growth and established the existence ... more This study investigated the impact of inflation on economic growth and established the existence of inflation growth relationship in the context of South Asian countries. In order to examine the impact of inflation on economic growth, the study has used the time series data for the period 1980-2012. The study found that there is high positive correlation exist between inflation and economic growth for all the countries. The cointegration result suggest that there is long run relationship exist for Malaysia. However, the rest of the countries have no long run relationship between inflation and economic growth. In order to know the short run dynamics and direction of causality the study used Error Correction and Granger causality test. The study also employed unidirectional VAR analysis to know the short run dynamics between inflation and economic growth. JEL Classification: E 00 and E 39
The present study examined the linkage between energy consumption and economic growth in India us... more The present study examined the linkage between energy consumption and economic growth in India uses the annual time series data covering the period from 1970-71 to 2011-12. The study used Gross Domestic Product as a proxy for economic growth and energy consumption (oil equivalent per capital). The empirical findings of the study suggest that there is both the short run and the long run relationship exist between energy consumption and economic growth. The Granger causality result confirms that there is unidirectional causality running from economic growth to energy consumption. That means the study support the conservation hypothesis. The impulse response result of the study suggests that India requires an alternative source of energy for faster economic growth. The variance decomposition of the study concluded that the rapid growth of the economy depends on the heavy energy consumption. From the policy recommendation point of view, the energy policy of India should give more importance to find out the alternative source of energy supply in order to meet the growing demand for energy. Moreover, to achieve sustainable energy conservation and macroeconomics stable India should follow the energy efficiency and self-sufficiency in energy production for faster economic growth.
The present study examines whether energy consumption fuels economic growth or vice versa. The re... more The present study examines whether energy consumption fuels economic growth or vice versa. The relationship is examined by using the annual data covering the period from 1970 to 2011. By employing the Granger causality test, the study empirically found that it is economic growth that fuels more demand for lignite and electricity consumption and there is growth of any energy variables that causes economic growth. In contrast, the out of sample forecasts in variance decomposition of VAR suggests that there is a bidirectional influence between electricity consumption and economic growth and lignite consumption and economic growth. Whereas a unidirectional influence from GDP growth in a natural gas consumption is found from this result. Therefore, the current study found, mixed and inconsistent results as compared to the previous studies in the Indian context. Moreover, on the basis of two econometric tools, the study with little more belief could suggest for reducing natural gas and oil consumption for boosting higher rates of economic growth in the country. I. Introduction Energy consumption and economic growth has long been establish to be highly correlated. Extensive research have been conducted to establish the dynamic relationship between energy consumption and economic growth. Nevertheless, no schematic facts have been established. Most of the earlier studies have focused on developing countries and newly industrial countries. There is less or sporadic studies have been conducted in the context of developing countries. Given the magnitude of India's energy consumption and economic growth, it attracts high attention in this line of research and there have been very few studies conducted in the recent years and most of the studies are based on the aggregate analysis of energy consumption. However, this paper aims to establish a dynamic relationship between energy consumption and economic growth on the disaggregate energy consumption. Therefore, this study fills the gap to shed the new light on the area of study in the context of India. The argument over the link between energy consumption and output has been wide spread. Mainly since the global oil shocks of the early 1970s. The directional of causality between these variables has been an emerging issue in recent decades. The findings in the existing literature not necessarily conform to this stereotyped causality. Therefore, it is an important task to examine the relationship between these variables on the basis stages and structure of the economy. Taking into account certain factors like Environmental quality reduction, rapid growth of population, High energy requirement for the soaring production to meet the growing demand in the economy, increasing worldwide energy price and reduce dependency from foreign energy resources, the importance of the subject to design efficient and practical policies is beyond question. The relationship between energy consumption and economic growth is a controversial issue which is evident from the number of empirical studies. From the very commencement, Kraft and Kraft (1978) investigated the causal relationship between energy consumption and economic growth covering the sample period from 1947-1974. The study found that unidirectional causality running from energy consumption to GNP growth in the United States. Akarca and Long (1980) found that a causal relationship does not exist between energy consumption and economic growth when, the study period is concise merely by 2 years. Ozturk (2010) examined the relationship taking into consideration about 100 studies with a roughly uniform distribution and concluded that four obtainable outcomes, namely unidirectional causality from energy consumption to growth, unidirectional causality from growth in energy consumption, bidirectional causality and neutrality. Over the years, much research has been done to determine the key factors impacting on economic growth, an energy being a new factor for growth but, no single study have not included in the traditional growth models. (Stern, 2011; Pir lo Geo and Eicea, 2012). We have seen most of the studies have explained growth and economic activity on the way of the production function. If we look at the neo classical models we could observe that capital, labour and land treated as the primary factors of production, while energy is used as an intermediate input finally produced by the primary factors of production. In addition to, neo classical economist like (Solow, 1974) assumes that capital and energy are perfectly substitutable. A reduction is energy consumption does not, under state of affairs of economic efficiency, which results in a reduction in economic growth. These analyses have lead to an importance in the conventional growth theory on the primary inputs, and in Fastidious, labour and capital, other given that land is treated as a subcategory of capital. Whereas, energy has played a minor role
The present study investigated the inflation growth nexus in the context of BRICS countries. The ... more The present study investigated the inflation growth nexus in the context of BRICS countries. The study used time series data covering from the period 1980 to 2012. The data sources are cumulated from the World Bank, World Economic Outlook (WEO). The empirical findings of the study indicate that a long run positive relationship between inflation and economic growth only for China and South Africa at the 5 percent level of significance. The study also found that there is a unidirectional causality between economic growth and inflation in the context of India whereas; bidirectional causality takes place in the case of China. The VAR analysis could not find a consistent short run relationship between inflation and economic growth over ten years ahead for BRICS countries. From the policy implication point of view the study suggests that policy makers in BRICS should consider the short run relationship between inflation and economic growth while, the China and South Africa policy makers should pay attention to both short run and long run relationship. The present study is one of very few studies which have examined the relationship between inflation and economic growth in the context of BRICS. To examine the long run equilibrium relationship between inflation and economic growth this study employed the advance ARDL bound testing approach of cointegration which is the solitary contribution to the existing literature. The empirical findings of the study suggest that the policy makers in BRICS should consider the short run relationship between inflation and economic growth in their policy making while the China and the South Africa policy makers should pay attention to both the short run and long run relationship.
We investigate the relationship between tourism and economic growth in 23 Indian States from 1997... more We investigate the relationship between tourism and economic growth in 23 Indian States from 1997 to 2011. Using panel autoregressive distributed lag model based on three alternative estimators such as mean group estimator (MG), pooled mean group (PMG) and dynamic fixed effects (DFE), we found that there is a significant relationship between tourism and economic growth in the long-run but not in short-run in India.
The study examines the linkage between energy consumption and economic growth in China. This pape... more The study examines the linkage between energy consumption and economic growth in China. This paper uses the annual time series data from the period 1978 to 2012. By employing the standard econometric tools the study finds that a high positive correlation exists between the set of variables. Result suggests that there is no long run relationship between energy consumption and economic growth in China. The analysis also reveals the china " s energy consumption support the " Neutrality Hypothesis ". The exploration of VAR result shows that the role of energy consumption in promoting economic growth is obvious in China as time goes on.
The present study investigated the output, energy and pollution nexus hypothesis in the context o... more The present study investigated the output, energy and pollution nexus hypothesis in the context of India. The study used the annual time series data for the period 1970-2010. The empirical findings of the study show that there is a high pairwise correlation exist between energy consumption and economic growth. The cointegration result suggests that there is a long-run equilibrium relationship exist between energy consumption, economic growth and CO2 emissions. The vector error correction result shows a positive and significant impact of energy consumption on CO2 emission. The result also reveals that economic growth has a positive and significant impact on energy consumption. Due to 1% increase in economic growth, it will increase the energy consumption 60% at the 5% level of significance. The Toda-Yamamoto Granger causality result indicates there is unidirectional causality running from energy consumption to carbon emission and economic growth to carbon emission.
This article investigates the existence of a threshold level of inflation and
how any such level ... more This article investigates the existence of a threshold level of inflation and how any such level affects the growth of Indian economy. The article also seeks to examine the dynamic short-run and long-run relationship between inflation and economic growth in India. By employing spline regression method to estimate the threshold level of inflation and the long-run and short-run relationships, the results show a statistically significant structural break in the relationship between inflation and economic growth at 4 per cent. The study suggests that if inflation exceeds the threshold point, that is, 4 per cent, it will negatively affect economic growth. The autoregressive distributed lag (ARDL) bound testing cointegration model suggests that there are two cointegration vectors when gross domestic product and rate of interest are considered as the dependent variables. This result confirms the existence of the long-run equilibrium relationship between economic growth, inflation, exchange rate and rate of interest. From the long-run analysis, the study found that inflation is positively related to economic growth, whereas the other variables are not significant.
This study examines the relationship between financial development and economic growth in India a... more This study examines the relationship between financial development and economic growth in India after the reform. The present study used monthly data from the period January 1994 to December 2011. The empirical result found that there exist two cointegrating equations and the Vector Error Correction Result shows that in the long run the stock market is affecting economic growth negatively but the increase of bank credit affects the economy positively. The result also found that money supply has negative impact on economic growth in the long run, whereas, tread openness has no impact on economic growth in the long run. From the policy implication point of view the study suggest that the evolution of financial sector tends to or is more likely to stimulate and promote economic growth when monetary authorities adopt liberalised and openness policies, to improve the size of the market intone with the macroeconomic stability.
This study investigated the impact of inflation on economic growth and established the existence ... more This study investigated the impact of inflation on economic growth and established the existence of inflation growth relationship in the context of South Asian countries. In order to examine the impact of inflation on economic growth, the study has used the time series data for the period 1980-2012. The study found that there is high positive correlation exist between inflation and economic growth for all the countries. The cointegration result suggest that there is long run relationship exist for Malaysia. However, the rest of the countries have no long run relationship between inflation and economic growth. In order to know the short run dynamics and direction of causality the study used Error Correction and Granger causality test. The study also employed unidirectional VAR analysis to know the short run dynamics between inflation and economic growth. JEL Classification: E 00 and E 39
The present study examined the linkage between energy consumption and economic growth in India us... more The present study examined the linkage between energy consumption and economic growth in India uses the annual time series data covering the period from 1970-71 to 2011-12. The study used Gross Domestic Product as a proxy for economic growth and energy consumption (oil equivalent per capital). The empirical findings of the study suggest that there is both the short run and the long run relationship exist between energy consumption and economic growth. The Granger causality result confirms that there is unidirectional causality running from economic growth to energy consumption. That means the study support the conservation hypothesis. The impulse response result of the study suggests that India requires an alternative source of energy for faster economic growth. The variance decomposition of the study concluded that the rapid growth of the economy depends on the heavy energy consumption. From the policy recommendation point of view, the energy policy of India should give more importance to find out the alternative source of energy supply in order to meet the growing demand for energy. Moreover, to achieve sustainable energy conservation and macroeconomics stable India should follow the energy efficiency and self-sufficiency in energy production for faster economic growth.
The present study examines whether energy consumption fuels economic growth or vice versa. The re... more The present study examines whether energy consumption fuels economic growth or vice versa. The relationship is examined by using the annual data covering the period from 1970 to 2011. By employing the Granger causality test, the study empirically found that it is economic growth that fuels more demand for lignite and electricity consumption and there is growth of any energy variables that causes economic growth. In contrast, the out of sample forecasts in variance decomposition of VAR suggests that there is a bidirectional influence between electricity consumption and economic growth and lignite consumption and economic growth. Whereas a unidirectional influence from GDP growth in a natural gas consumption is found from this result. Therefore, the current study found, mixed and inconsistent results as compared to the previous studies in the Indian context. Moreover, on the basis of two econometric tools, the study with little more belief could suggest for reducing natural gas and oil consumption for boosting higher rates of economic growth in the country. I. Introduction Energy consumption and economic growth has long been establish to be highly correlated. Extensive research have been conducted to establish the dynamic relationship between energy consumption and economic growth. Nevertheless, no schematic facts have been established. Most of the earlier studies have focused on developing countries and newly industrial countries. There is less or sporadic studies have been conducted in the context of developing countries. Given the magnitude of India's energy consumption and economic growth, it attracts high attention in this line of research and there have been very few studies conducted in the recent years and most of the studies are based on the aggregate analysis of energy consumption. However, this paper aims to establish a dynamic relationship between energy consumption and economic growth on the disaggregate energy consumption. Therefore, this study fills the gap to shed the new light on the area of study in the context of India. The argument over the link between energy consumption and output has been wide spread. Mainly since the global oil shocks of the early 1970s. The directional of causality between these variables has been an emerging issue in recent decades. The findings in the existing literature not necessarily conform to this stereotyped causality. Therefore, it is an important task to examine the relationship between these variables on the basis stages and structure of the economy. Taking into account certain factors like Environmental quality reduction, rapid growth of population, High energy requirement for the soaring production to meet the growing demand in the economy, increasing worldwide energy price and reduce dependency from foreign energy resources, the importance of the subject to design efficient and practical policies is beyond question. The relationship between energy consumption and economic growth is a controversial issue which is evident from the number of empirical studies. From the very commencement, Kraft and Kraft (1978) investigated the causal relationship between energy consumption and economic growth covering the sample period from 1947-1974. The study found that unidirectional causality running from energy consumption to GNP growth in the United States. Akarca and Long (1980) found that a causal relationship does not exist between energy consumption and economic growth when, the study period is concise merely by 2 years. Ozturk (2010) examined the relationship taking into consideration about 100 studies with a roughly uniform distribution and concluded that four obtainable outcomes, namely unidirectional causality from energy consumption to growth, unidirectional causality from growth in energy consumption, bidirectional causality and neutrality. Over the years, much research has been done to determine the key factors impacting on economic growth, an energy being a new factor for growth but, no single study have not included in the traditional growth models. (Stern, 2011; Pir lo Geo and Eicea, 2012). We have seen most of the studies have explained growth and economic activity on the way of the production function. If we look at the neo classical models we could observe that capital, labour and land treated as the primary factors of production, while energy is used as an intermediate input finally produced by the primary factors of production. In addition to, neo classical economist like (Solow, 1974) assumes that capital and energy are perfectly substitutable. A reduction is energy consumption does not, under state of affairs of economic efficiency, which results in a reduction in economic growth. These analyses have lead to an importance in the conventional growth theory on the primary inputs, and in Fastidious, labour and capital, other given that land is treated as a subcategory of capital. Whereas, energy has played a minor role
The present study investigated the inflation growth nexus in the context of BRICS countries. The ... more The present study investigated the inflation growth nexus in the context of BRICS countries. The study used time series data covering from the period 1980 to 2012. The data sources are cumulated from the World Bank, World Economic Outlook (WEO). The empirical findings of the study indicate that a long run positive relationship between inflation and economic growth only for China and South Africa at the 5 percent level of significance. The study also found that there is a unidirectional causality between economic growth and inflation in the context of India whereas; bidirectional causality takes place in the case of China. The VAR analysis could not find a consistent short run relationship between inflation and economic growth over ten years ahead for BRICS countries. From the policy implication point of view the study suggests that policy makers in BRICS should consider the short run relationship between inflation and economic growth while, the China and South Africa policy makers should pay attention to both short run and long run relationship. The present study is one of very few studies which have examined the relationship between inflation and economic growth in the context of BRICS. To examine the long run equilibrium relationship between inflation and economic growth this study employed the advance ARDL bound testing approach of cointegration which is the solitary contribution to the existing literature. The empirical findings of the study suggest that the policy makers in BRICS should consider the short run relationship between inflation and economic growth in their policy making while the China and the South Africa policy makers should pay attention to both the short run and long run relationship.
We investigate the relationship between tourism and economic growth in 23 Indian States from 1997... more We investigate the relationship between tourism and economic growth in 23 Indian States from 1997 to 2011. Using panel autoregressive distributed lag model based on three alternative estimators such as mean group estimator (MG), pooled mean group (PMG) and dynamic fixed effects (DFE), we found that there is a significant relationship between tourism and economic growth in the long-run but not in short-run in India.
The study examines the linkage between energy consumption and economic growth in China. This pape... more The study examines the linkage between energy consumption and economic growth in China. This paper uses the annual time series data from the period 1978 to 2012. By employing the standard econometric tools the study finds that a high positive correlation exists between the set of variables. Result suggests that there is no long run relationship between energy consumption and economic growth in China. The analysis also reveals the china " s energy consumption support the " Neutrality Hypothesis ". The exploration of VAR result shows that the role of energy consumption in promoting economic growth is obvious in China as time goes on.
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Papers by Jaganath Behera
how any such level affects the growth of Indian economy. The article
also seeks to examine the dynamic short-run and long-run relationship
between inflation and economic growth in India. By employing spline
regression method to estimate the threshold level of inflation and the
long-run and short-run relationships, the results show a statistically
significant structural break in the relationship between inflation and
economic growth at 4 per cent. The study suggests that if inflation
exceeds the threshold point, that is, 4 per cent, it will negatively affect
economic growth. The autoregressive distributed lag (ARDL) bound
testing cointegration model suggests that there are two cointegration
vectors when gross domestic product and rate of interest are considered
as the dependent variables. This result confirms the existence of the
long-run equilibrium relationship between economic growth, inflation,
exchange rate and rate of interest. From the long-run analysis, the study
found that inflation is positively related to economic growth, whereas
the other variables are not significant.
how any such level affects the growth of Indian economy. The article
also seeks to examine the dynamic short-run and long-run relationship
between inflation and economic growth in India. By employing spline
regression method to estimate the threshold level of inflation and the
long-run and short-run relationships, the results show a statistically
significant structural break in the relationship between inflation and
economic growth at 4 per cent. The study suggests that if inflation
exceeds the threshold point, that is, 4 per cent, it will negatively affect
economic growth. The autoregressive distributed lag (ARDL) bound
testing cointegration model suggests that there are two cointegration
vectors when gross domestic product and rate of interest are considered
as the dependent variables. This result confirms the existence of the
long-run equilibrium relationship between economic growth, inflation,
exchange rate and rate of interest. From the long-run analysis, the study
found that inflation is positively related to economic growth, whereas
the other variables are not significant.