1-INTRODUCTION 1

Project and thesis entitled Study "The relationship between energy consumption and GDP: evidence from a group of 13 Asian countries". The relationship and causality between energy consumption and GDP is an important issue in the field of energy economics and energy use policies.

Introduction

The Gross Domestic Product (GDP) is one of the primary indicators used to measure the health of a country's economy. It represents the total dollar value of all goods and services produced over a specific period of time, often referred to as the size of the economy.

Research Motivation

Investors look to the growth rate to decide whether to adjust their asset allocation.

Literature Review

In the paper, the authors investigated the direction of the causal relationship between gross national product (GNP) and energy consumption in the USA for the period 1947-1974. Using the Sims causality test, they found that there is unidirectional causality running from GNP to energy expenditure.

Objectives

Using monthly data (from January 1973 to March 1978) and Granger causality tests, they found a negative causality running from energy consumption to employment. The absence of a causal relationship between energy consumption and economic growth/employment in the United States has also been confirmed by the research conducted by Yu and Hwang (1984), Yu and Choi (1985), Erol and Yu (1987a), and Yu et al.

Relation between Energy consumption & GDP 4-13

What is GDP

GDP is equal to the total monetary value of all final goods and services exchanged within a certain limit during a certain period of time. For the United States, GDP usually means the dollar value of all goods and services purchased over the course of a year.

Types of GDP

The expenditure Approach……………………………………5 7

So in some sense, higher GDP should equate to greater human progress because it means more valuable goods and services have been created. The total expenditure on all final goods and services is also income received as wages, profits, rent and interest income.

How GDP is Calculated

By adding up all wages, profits, rents and interest income, we can determine GDP. In addition, GDP is affected by variables beyond economists' control, such as the economic condition of our trading partners, monetary factors such as the value of the dollar, state and local government spending restrictions, and consumers' subjective views of companies that affect their consumption/investment choices. If all you remember from this essay is that jobs are created and lost based on the relative strength of the various components of GDP.

Please consider joining us if you, the PolicyMic readers, would like to see this series continue as we further explore C = personal consumption spending, perhaps the most necessary factor to spur our economic recovery.

How GDP Affects Economy

In the literature, many studies have investigated the relationship between GDP and energy consumption. Third, the feedback hypothesis, which suggests that there is a bidirectional causal relationship between energy consumption and GDP. Fourth, the growth hypothesis suggests that there is a unidirectional causal relationship between energy consumption and GDP.

In the long run, a causal relationship was found for trade (export or import) and energy consumption.

Overview of Asian Economies

China has implemented a series of reforms in finance, market access, labor mobility and taxation to boost growth efficiency and boost domestic demand. If successful, China's reforms could have tremendous positive effects on trading partners supplying agricultural products, consumer goods and modern services. However, a disorderly adjustment of the Chinese economy would have a negative impact on regional and global growth, especially in countries dependent on natural resource exports.

In this section, we present the Asian economies under study in terms of CO2 emissions, GDP per population, energy consumption and economic development.

Overview of Bangladesh

Some initiatives already announced by the government, such as tax reforms and removing barriers to private investment, could also boost growth in the short term. In Bangladesh, a positive relationship between energy consumption and economic growth is found for Bangladesh using data from and reported that higher levels of energy consumption led to higher levels of growth. By the investigated the possible existence of dynamic causality between electricity consumption, energy consumption, carbon emissions and economic growth in Bangladesh.

The results indicate the Feedback Hypothesis that there is unidirectional causality between energy consumption and economic growth in both the short and long term, while in the short term there is bidirectional causality in the long term between electricity consumption and GDP, but there is no causal relationship in the short term.

Overview of India

However, if we take into account the presented breakdown of the variance of the GDP growth rate, it appears that the variation of the GDP growth rate cannot be explained by the consumption of natural gas. It presents a variance breakdown of the oil growth rate results by n versus the GDP growth rate. However, the variance decomposition of the growth rate of manufactured GDP in the same table shows that the growth rate of GDP is not significantly explained by oil consumption shocks.

Which suggests that oil consumption is not a key to the GDP growth rate of the economy or it is insignificant to the economic growth of India.

Overview of Maldives

This result is relatively similar to Granger causality, where the study found that GDP growth rate has no impact on oil consumption. The fiscal deficit narrowed from 10.6 percent of GDP in 2016 to 2.5 percent in 2017, driven mainly by a reduction in public investment from 10.9 percent of GDP in 2016 to 8.2 percent in 2017, as well as reducing spending on food subsidies and beyond. Aasandha Unlimited Healthcare System. Excluding the Public Sector Investment Program, the current fiscal balance went from a deficit of 2.0 percent of GDP in 2015 to an estimated surplus of 5.7 percent of GDP in 2017, reflecting revenue growth and reforms of current expenses.

Public debt is estimated to have reached 61.2 percent of GDP in 2017, an increase from 59.7 percent of GDP in 2016, boosted by projected external borrowing and the issuance of $200 million in Eurobonds.

Overview of Nepal

In addition, panel Granger causality tests are used to examine the direction of causality between energy consumption and GDP. The panel Granger causality results prove two-way causality effects between energy consumption and GDP, which supports the neutrality hypothesis, which means that these variables have strong interdependence between each other. Energy consumption in all sectors and for all fuel types is not statistically correlated with all the economic parameters tested in the assessment.

It refers to the neutrality hypothesis. Input of per capita energy consumption is suggested to promote higher economic growth in Nepal.

Table 3.5: Energy Consumption and GDP for Nepal [25], [15].

Overview of Pakistan

Because the economic growth of a country is considered the strength of a state's character. The relationship between energy and economic growth can be positive or negative depending on the country in question. In this study, we have tried to find out the direction of causal relationship between energy consumption and economic growth in Pakistan.

The main objective of this study is to analyze the impact of energy consumption on economic growth and examine the causality between variables.

Table 3.6: Energy Consumption and GDP for Pakistan [25], [16].

Overview of Sri-Lanka

We first found the strength of relationship between energy consumption and GDP, then we examined the causal relationship between growth in energy consumption and GDP. This study seeks to shed light on the empirical relationship between energy consumption and GDP in Sri Lanka and found the Neutrality Hypothesis using the vector error correction model (VECM) estimation. The empirical evidence suggests that there is a long-run relationship between the three variables, which supports the endogeneity of energy consumption and actual output.

These results suggest important policy implications, since the adoption of appropriate structural policies aimed at improving economic efficiency can induce energy consumption without inhibiting economic growth.

Table 3.7: Energy Consumption and GDP for Sri Lanka [25], [17].

Overview of Afghanistan

The analysis is conducted using advanced panel estimation approaches and found no causality in the short run, while in the long run the results indicate that there are bidirectional relationships between variables.

Overview of Bhutan

This paper examines bidirectional links between energy consumption and GDP using data from Bhutan over the period 2014–2017. Our empirical results show that there is a two-way causal relationship between energy consumption and GDP, and they also find the neutrality hypothesis in the long run. The study suggests that energy policies should acknowledge the differences in the nexus between energy consumption and GDP in order to maintain sustainable economic growth in Bhutan.

Overview of China

Overview of Vietnam

This paper uses time series data for GDP per population and energy consumption per per capita (PCEC) for the periods 1976-2010 in Vietnam. In this study, the energy consumption per population expressed in kg oil equivalent, and GDP per per capita is expressed in constant 2000 US$. Using cointegration and causality analysis, this paper examines the causal relationship between electricity consumption and GDP in Vietnam over the period.

Empirical results show that there is no causal effect of electricity consumption per capita on gross domestic product (GDP) per capita, either in the short or long run, but that there is a causality relationship that runs from GDP per capita to electricity consumption per capita in the long run. -walk.

Table 3.11: Energy Consumption and GDP for Vietnam [25], [21].

Overview of Malaysia

This result is useful for understanding the role of economic growth in the formulation of energy policies in Vietnam to manage the current electricity shortage accompanied by economic growth and to ensure national energy security. The Granger causality model is used to measure the causal effect of energy consumption and gross domestic product. The results show that oil and coal consumption do not Granger cause economic growth and vice versa.

There is a unidirectional relationship between gas and economic growth, with causality running from electricity use to economic growth.

Overview of Philippine

This paper aims to investigate the relationship between energy consumption and GDP and to address policy problems on energy consumption in Malaysia using data from 2014-2017 and find the Neutrality Hypothesis. Electricity in the Philippines is produced from various sources such as coal, oil, natural gas, biomass, hydroelectric, solar, wind and geothermal sources. In terms of energy use, conventional fossil fuels (oil and gas) are the main source for its primary energy needs.

This study extends the research in this area by studying the long-run and causal relationships between GDP and consumption of energy, labor and capital based on the neoclassical mode of aggregate production technology of a sector using data of energy consumption and real GDP for ASEAN from the year. 2014 to 2017 and found the conservation hypothesis.

Table 3.13: Energy Consumption and GDP for Philippine [25], [23].

Overview of Thailand

This paper attempts to investigate the relationship between energy consumption and GDP for Thailand in the period from 2014 to 2017 and found the feedback hypothesis Applying the NARDL approach. The existence of stationary panels for thirteen Asian countries and bidirectional causality between energy consumption and GDP in all sampled countries. To find long-term and short-term elasticity between energy consumption and GDP, we found the types of tests used in thirteen Asian countries.

The results show that in the short run there is a feedback relationship between energy consumption and GDP, and between energy consumption and exports.