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Do energy, inflation, and financial development stimulate economic welfare in India? Empirical insights from novel dynamic ARDL and KRLS simulations

Author

Listed:
  • Mohammad Subhan

    (Aligarh Muslim University)

  • Aqsa Anjum

    (Aligarh Muslim University)

  • M. N. Zamir

    (Aligarh Muslim University)

  • Dervis Kirikkaleli

    (European University of Lefke
    Lebanese American University)

Abstract

The present study focuses on investigating the effect of renewable and non-renewable energy consumption (REC and NREC), financial development (FD), and inflation (INF) on economic welfare (EW) in India during 1990–2019. In this research, we employ a novel dynamic autoregressive distributed lag model and a kernel-based machine learning algorithm and regularise least squares to detect causal linkages among the variables. To measure the economic welfare index, this research uses the PCA analysis with GDP, human capital, environmental damage, number of employed persons, life expectancy at birth, and real consumption in households and by the government. According to the findings, the NREC and FD have been favourably contributing to EW. Conversely, the EW is adversely affected by REC. However, INF also has an adverse impact on EW, although it may be insignificant in the long run and significant in the short run.

Suggested Citation

  • Mohammad Subhan & Aqsa Anjum & M. N. Zamir & Dervis Kirikkaleli, 2024. "Do energy, inflation, and financial development stimulate economic welfare in India? Empirical insights from novel dynamic ARDL and KRLS simulations," Economic Change and Restructuring, Springer, vol. 57(4), pages 1-27, August.
    • Handle: RePEc:kap:ecopln:v:57:y:2024:i:4:d:10.1007_s10644-024-09723-9
    DOI: 10.1007/s10644-024-09723-9
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    More about this item

    Keywords

    GDP; Energy consumption; Economic welfare; Financial development; Inflation;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D6 - Microeconomics - - Welfare Economics
    • G00 - Financial Economics - - General - - - General

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