Abstract:
This paper investigates the causal relationship between energy consumption and economic growth for Algeria, Egypt, Iran, Jordan, Morocco, Saudi Arabia, Tunisia and United Arab Emirates from 1975 to 2011. To examine this relationship, we use Autoregressive Distributed Lag (ARDL) bounds testing approach of co-integration and vector error-correction models. The co-integration test results show that there is no co-integration between the energy consumption and the economic growth in four countries (Algeria, Jordan, Tunisia and United Arab Emirates). Thus, causal relationship cannot be estimated for these countries. However, the co-integration and causal relationship is found in four countries (Egypt, Iran, Morocco and Saudi Arabia). The overall results indicate that there is no relationship between the energy consumption and the economic growth in most of the MENA countries. Further evidence indicates that policies for energy conservation can have a little or no impact on economic growth in most of the MENA countries.
