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An Econometric Study of Economic Growth, Energy and Exports in Mauritius: Implications for Trade and Climate Policy

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  • Riad Sultan

    (Department of Economics and Statistics, Faculty of Social Studies and Humanities, University of Mauritius,Reduit, Mauritius)

Abstract

While electricity from fossil fuels is among a major source of greenhouse gases and global warming, it is also a key resource in the industrial sector geared towards exports and economic growth. This study attempts to examine the export-GDP nexus and electricity-GDP nexus in addition to a supplementary hypothesis between exports and electricity in Mauritius for the period of 1970- 2009. An augmented neo-classical aggregate production model is used. The ARDL bounds test and the Johansen cointegration test confirm the existence of a long-run relationship between these variables. The multivariate Granger-causality analysis indicates that electricity and exports Granger-cause economic growth in the long-run. Electricity remains a significant causal variable in the short-run and is also found to lead exports. The empirical findings suggest that conserving electricity as a climate policy may not be conducive for exports and economic growth. The use of renewable sources for electricity may be the right option.

Suggested Citation

  • Riad Sultan, 2012. "An Econometric Study of Economic Growth, Energy and Exports in Mauritius: Implications for Trade and Climate Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 225-237.
    • Handle: RePEc:eco:journ2:2012-04-3
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    2. Azreen Benazir Abdullah Ahmed & Sakib Amin & Charles Harvie & Rabindra Nepal, 2021. "The Nexus Between Energy and Trade in South Asia: A Panel Analysis," Economic Papers, The Economic Society of Australia, vol. 40(2), pages 134-151, June.
    3. Akhmat, Ghulam & Zaman, Khalid & Shukui, Tan & Sajjad, Faiza, 2014. "Does energy consumption contribute to climate change? Evidence from major regions of the world," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 123-134.
    4. P. Srinivasan & Inder Siddanth Ravindra, 2015. "Causality among Energy Consumption, CO2 Emission, Economic Growth and Trade," Foreign Trade Review, , vol. 50(3), pages 168-189, August.
    5. repec:ipg:wpaper:2014-592 is not listed on IDEAS
    6. Lili Li, 2014. "Empirical Research on the Relationship between China Export and New Energy Consumption," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 229-237.
    7. Alexandra Tsiotras & Antonio Estache, 2014. "In the short run, energy efficiency concerns and trade protection hurt each other and growth, but in the long run, not necessarily so: 1980-2010 Latin American Evidence," Working Papers ECARES ECARES 2014-38, ULB -- Universite Libre de Bruxelles.
    8. Eyup Dogan, 2016. "The Relationship between Economic Growth, Energy Consumption and Trade," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 4(1), pages 70-80, March.

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    More about this item

    Keywords

    Growth; Exports; Electricity; Granger causality; Climate policy;
    All these keywords.

    JEL classification:

    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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