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Effect of Energy Prices on Economic Growth in the ECOWAS Sub-Region: Investigating the Channels Using Panel Data

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  • Prince Boakye Frimpong
  • Akua Oforiwaa Antwi
  • Samuel Ebi Yamike Brew

Abstract

The article empirically examines the effect of energy prices on economic growth within the Economic Community of West African States sub-region by acknowledging that the effect of energy prices on growth is quintessentially indirect and hence can be tracked through some channels. Exploiting the System Generalized Methods of Moments estimation technique for the period spanning 2002–2015, the results indicate that the overall effect of energy prices on economic growth is significantly negative. This effect propagates mainly through government consumption expenditure and investment, albeit its effect through real interest rate is positive. However, its negative effects on government consumption, investment, and exchange rate significantly overwhelm the positive effect from real interest rate.

Suggested Citation

  • Prince Boakye Frimpong & Akua Oforiwaa Antwi & Samuel Ebi Yamike Brew, 2018. "Effect of Energy Prices on Economic Growth in the ECOWAS Sub-Region: Investigating the Channels Using Panel Data," Journal of African Business, Taylor & Francis Journals, vol. 19(2), pages 227-243, April.
    • Handle: RePEc:taf:wjabxx:v:19:y:2018:i:2:p:227-243
    DOI: 10.1080/15228916.2017.1405706
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    Cited by:

    1. GU, Jianqiang & Umar, Muhammad & Soran, Semih & Yue, Xiao-Guang, 2020. "Exacerbating effect of energy prices on resource curse: Can research and development be a mitigating factor?," Resources Policy, Elsevier, vol. 67(C).
    2. Zhao, Jun & Wang, Bo & Dong, Kangyin & Shahbaz, Muhammad & Ni, Guohua, 2023. "How do energy price shocks affect global economic stability? Reflection on geopolitical conflicts," Energy Economics, Elsevier, vol. 126(C).
    3. Shahi Md. Tanvir Alam, 2022. "Renewable Energy (Solar and Wind) Generation and its Effect on some Variables for Selected EU Countries with Panel VAR Model," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 303-310, September.

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