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

Riad Sultan
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Riad Sultan: Department of Economics and Statistics, Faculty of Social Studies and Humanities, University of Mauritius,Reduit, Mauritius

International Journal of Energy Economics and Policy, 2012, vol. 2, issue 4, 225-237

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.

Keywords: Growth; Exports; Electricity; Granger causality; Climate policy (search for similar items in EconPapers)
JEL-codes: Q37 Q43 Q48 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2012-04-3

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