Nonlinear Causality Between Renewable Energy, Economic Growth, and Unemployment: Evidence from Tunisia
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Nonlinear Causality Between Renewable Energy, Economic Growth, and Unemployment: Evidence from Tunisia Mounir Ben Mbarek 1 & Ines Abdelkafi 1 & Rochdi Feki 1
Received: 19 October 2015 / Accepted: 20 January 2016 # Springer Science+Business Media New York 2016
Abstract Knowing the real dynamic links between renewable energy use and economic growth is crucial for economic and energy policy decision; we address this issue for Tunisia. This study investigates the nonlinear causality between renewable energy (REG) consumption, economic growth measured by the gross domestic product (GDP), total energy consumption (TEC), and the unemployment rate (UR) on the basis of annual data from 1980 to 2012 by using a nonlinear causality test. Our study reveals different results. This research improves our understanding of the broad effects and impacts of renewable energy stimulus programs in economic development and environmental challenges. Keywords Renewable energy . Causality . Sensitivity analysis . Tunisia
Introduction The causality between renewable energy use and economic growth is and has been a debatable issue. In this area of empirical literature, numerous works used an ample variety of methodologies and models to determine the correlation or even to
* Mounir Ben Mbarek [email protected] Ines Abdelkafi [email protected] Rochdi Feki [email protected]
1
Department of Economics, University of Management and Economic Sciences of Sfax, Street of Airport km 4.5, LP 1088, 3018 Sfax, Tunisia
J Knowl Econ
investigate for the causal direction between renewable energy and GDP growth. A great bulk of literature has concentrated on the links between energy use and economic development (Ben Mbarek et al. 2014; Saidi and Hammami 2015; Ben Mbarek et al. 2015). Majority of these studies have based on linear models and have found different and mixed results. Otherwise, another strand of the literature has highlighted on the importance of nonlinear causality use to investigate the dynamic links between economic and energetic variables. Indeed, the majority of empirical studies dealing with causality links among variables focused on linear relationships; with the increasing of nonlinear dynamics of economic and financial time series, there is a significant interest in nonlinear causality, based on nonlinear relationships between economic and financial variables. Recent studies about renewable energy consumption and economic growth manifest four main expectations: (1) unidirectional causality from renewable energy to economic growth—means that renewable energy consumption can be considered as a limiting factor, or essential input, to economic growth (growth hypothesis); (2) unidirectional causality from economic growth to renewable energy—a GDP growth leads to increased renewable energy consumption with no feedback (conservation hypothesis); (3) bidirectional causality between renewable energy and economic growth—indicates that both variables influence each other (feedback hypothesis); and (4) the absence of causal
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