energy consumption real income and temporal causality results from a multi country study based on cointegration and error correction modelling techniques abstract unlike previous studies on the causal relationship between energy consumption and economic growth this paper illustrates how the finding of cointegration i e long term equilibrium relationship between these variables may be used in testing granger causality based on the most recent johansen s multivariate cointegration tests preceded by various unit root or non stationarity tests we test for cointegration between total energy consumption and real income of six asian economies india pakistan malaysia singapore indonesia and the philippines non rejection of cointegration between variables rules out granger non causality and imples at least one way of granger causality either unidirectional or bidirectionial secondly by using a dynamic vector error correction model we then analyse the direction of granger causation and hence the within sample granger exogeneity or endogeneity of each of the variables thirdly the relative strength of the causality is gauged through the dynamic variance decomposition technique by decomposing the total impact of an unanticipated shock to each of the variables beyond the sample period into proportions attributable to shocks in the other variables including its own in the bivariate system results based on these tools of methodology indicate that while all pair wise relationships shared common univariate integrational properties only relationships for three countries india pakistan and indonesia were cointegrated for these countries temporal causality results were mixed with unidirectional causality from energy to income for india exactly the reverse for indonesia and mutual causality for pakistan the vdcs were not inconsistent with these results and provided us with an additional insight as to the relatively more dominant direction of causation in pakistan simple bivariate vector autoregressive models for the three non cointegrated systems did not indicate any direction of causality significantly in either direction

the relationship between energy and production evidence from turkish manufacturing industry this paper investigates the relationship between energy and production at the industry level in an emerging market turkey in a multivariate framework the electricity consumption and value added relation is examined in the turkish manufacturing industry while also accounting for labor and fixed investment we find that labor fixed investment electricity consumption and value added are related via three cointegrating vectors the vec results indicate uni directional causality running from electricity consumption to value added generalized impulse response and variance decomposition analyses confirm these results thus energy input appears to be closely related to production hence energy saving technologies and increased energy efficiency may increase the growth in manufacturing value added

a comment on efficient propagation of shocks and the optimal return on money lotteries are introduced into cavalcanti and erosa 2008 2 a version of trejos and wright 1995 4 with aggregate shocks lotteries improve welfare and eliminate the two notable features of the optimum with deterministic trades over production and history dependence moreover the optimum can be supported by buyer take it or leave it offers

money supply announcements and interest rates does monetary policy matter abstract most current explanations of the effect of money supply announcements on the rate of interest center on central bank policy this paper analyzes a flexible price macroeconomic model where present and future monetary policy have no influence on either interest rates or real output but monetary data signal information about real economic activity which influences both short and long term real rates of interest the magnitude of the interest rate response is shown to depend on the difference in the income elasticities of currency and deposit demand and the relative size of monetary and real disturbances to the economy

search bargaining money and prices the goal of this paper is to extend existing search theoretic models of fiat money which until now have assumed that the price level is exogenous by explicitly incorporating bilateral bargaining this allows us to determine the price level endogenously and leads to additional insights concerning the role of money for example we find that monetary equilibria are generally inefficient in the sense that output and prices differ from the solution to a social planner s problem although the difference can become small as the discount rate or search friction vanishes we also find that there exist nonstationary inflationary equilibria

sectoral analysis of the causal relationship between electricity consumption and real output in pakistan this study uses the annual data from 1972 to 2010 to assess the causal relationship between electricity consumption and real output at the aggregate and sectoral levels in pakistan this study covers three main economic sectors in pakistan namely agricultural manufacturing and services sectors our cointegration results reveal that the variables are cointegrated at the aggregate and sectoral levels at the aggregate level we find that there is uni directional granger causality running from electricity consumption to real output in pakistan at the sectoral level we find that electricity consumption granger causes real output in the manufacturing and services sectors however there is no causal relationship between electricity consumption and real output in the agricultural sector the policy implication of these results is that electricity conservation policies in general would deteriorate the process of economic growth as well as the real output in the manufacturing and services sectors in pakistan nevertheless we suggest the pakistani government to implement the electricity conservation policies merely to the agricultural sector because such policies may have less or no adverse impact on its real output

pandemics of the poor and banking stability we first develop a theoretical model that shows that the likelihood of a collapse of the banking industry of a developing country increases as the joint prevalence of large pandemics such as aids and malaria increases we also show that the optimal bank reserves increase as the prevalence increases in the empirical part of the paper we consider a large dataset of developing countries and we exhibit a causality effect from combined prevalence to deposit turnover as well as causality effect from an increase of combined prevalence to an increase in bank reserves those empirical facts therefore support our theoretical findings

the interdependent relationship between sectoral productivity and disaggregated energy consumption in malaysia markov switching approach abstract this study examines the interdependent relationship between sectoral productivity and disaggregated energy consumption in malaysia by employing the markov switching technique several outcomes are reached firstly the regime movement of gdp during regime 2 is influenced by disaggregated energy consumption secondly industrial and manufacturing productivity of regime 1 and regime 2 responded with disaggregated energy consumption finally the regimes carbon emissions depend on both of manufacturing and industrial productivity this study recommends efficient consumption of energy and the use of green technology in order to minimise energy consumptions and environment pollution

electricity consumption and economic growth in china cointegration and co feature analysis abstract this paper applies the cointegration theory to examine the causal relationship between electricity consumption and real gdp gross demostic product for china during 1978 2004 our estimation results indicate that real gdp and electricity consumption for china are cointegrated and there is only unidirectional granger causality running from electricity consumption to real gdp but not the vice versa then hodrick prescott hp filter is applied to decompose the trend and fluctuation component of the gdp and electricity consumption series the estimation results indicate that there is cointegration between not only the trend components but also the cyclical components of the two series which implies that the granger causality is probably related with the business cycle the estimation results are of policy implication to the development of electric sector in china

a note on the causal relationship between energy and gdp in taiwan abstract this paper re examines the causality between energy consumption and gdp by using updated taiwan data for the period 1954 1997 as a secondary contribution we investigate the causal relationship between gdp and the aggregate as well as several disaggregate categories of energy consumption including coal oil natural gas and electricity applying granger s technique we find bidirectional causality between total energy consumption and gdp we find further that different directions of cause exist between gdp and various kinds of energy consumption

energy use and output growth in canada a multivariate cointegration analysis using a neo classical one sector aggregate production technology where capital labor and energy are treated as separate inputs this paper develops a vector error correction vec model to test for the existence and direction of causality between output growth and energy use in canada using the johansen cointegration technique the empirical findings indicate that the long run movements of output labor capital and energy use in canada are related by two cointegrating vectors then using a vec specification the short run dynamics of the variables indicate that granger causality is running in both directions between output growth and energy use hence an important policy implication of the analysis is that energy can be considered as a limiting factor to output growth in canada

the relationship between energy and gnp further results this paper reexamines the casuality between gnp and energy consumption by using updated us data for the period 1947 1979 as a secondary contribution we investigate the causal relationship between energy consumption and employment applying sims technique we find no causal relationship between gnp and energy consumption we find further that there is a slight unidirectional flow running from employment to energy consumption economic interpretations of the empirical results are also presented

are reserve requirements relevant for economic stabilization abstract the level of the required reserve ratio and the payment of interest on required reserves are irrelevant for economic stability 1 when the central bank appropriately adjusts its interest elasticity of supply of reserves or currency to offset changes in the required reserve ratio or in the interest rate paid on required reserves or 2 when economic agents form their price level expectations rationally conditional on the current interest rate

efficient propagation of shocks and the optimal return on money abstract we study optimal allocations in an environment in which money is essential due to lack of commitment and anonymity of individuals because the economy features aggregate preference shocks we apply a notion of implementability that allows for allocations with non trivial business cycle dynamics for the propagation of shocks we show that history dependence is predicted by the theory of second best and becomes necessary for optimality when the degree of patience is neither too low nor too high our analysis concludes with a discussion of whether there is a role for the propagation of shocks in alternative economic environments

the causal relationship between electricity consumption and economic growth in the asean countries abstract this paper investigates the causal relationship between electricity consumption and economic growth among the association of south east asian nations asean 4 members namely indonesia malaysia singapore and thailand using modern time series techniques for the period 1971 2002 the results indicate that there is a bi directional causality between electricity consumption and economic growth in malaysia and singapore this means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in the two countries however uni directional causality runs from economic growth to electricity consumption in indonesia and thailand without any feedback effect thus electricity conservation policies can be initiated without deteriorating economic side effects in the two countries

the dynamics of oil consumption and economic growth in malaysia abstract this study attemps to investiagte the causal relationship between oil consumption and economic growth in malaysia where oil consumption and real gross domestic product have been rapidly increased in recent years to this end the study employs annual data covering the period 1965 2011 tests for unit roots co integration and granger causality based on the error correction models are presented the overall results support the existence of bi directional causality between oil consumption and economic growth in malaysia this means that an increase in oil consumption directly affect economic growth thus in order not to make an adverse effect on economic growth malaysia should endeavor to overcome the constraints on oil consumption moreover it appears that economic growth induces oil consumption

electricity consumption growth nexus the case of malaysia abstract the goal of this paper is to model the relationship between electricity consumption and real gross domestic product gdp for malaysia in a bivariate and multivariate framework we use time series data for the period 1971 2003 and apply the bounds testing approach to search for a long run relationship our results reveal that electricity consumption real gdp and price share a long run relationship the results of the autoregressive distributed lag ardl estimates of long run elasticity of electricity consumption on gdp are found to be around 0 7 and statistically significant finally in the short run the results of the causality test show that there is a unidirectional causal flow from electricity consumption to economic growth in malaysia from these findings we conclude that malaysia is an energy dependent country leading us to draw some policy implications this paper adds support and validity thus reducing the policy makers concern on the ambiguity of the electricity and growth nexus in malaysia

structural break unit root and the causality between energy consumption and gdp in turkey abstract this paper tries to investigate a series of unit root and causality tests to detect causality between the gdp and energy consumption in turkey employing hsiao s version of granger causality method for the 1950 2000 period the conventional unit root tests indicate the series are i 1 whereas the endogenous break unit root tests proposed by zivot and andrews zivot e and andrews d w k 1992 further evidence on the great crash the oil price shock and the unit root hypothesis journal of business and economics statistics 10 251 270 and perron perron p 1997 further evidence on breaking trend functions in macroeconomic variables journal of econometrics 80 355 385 reveal that the series are trend stationary with a structural break therefore it is inappropriate to take the first difference of the data to achieve stationarity the main conclusion of this study is that there is no evidence of causality between energy consumption and gdp in turkey based on the detrended data

bank reserves and financial stability a stochastic financial model is developed which derives the reserve levels on financial assets which minimize price level fluctuations it is shown that these levels of reserves are a function of the structure of unanticipated shocks to asset demands and are in general quite different from the levels which minimize the fluctuations of either the nominal or real value of these assets application of the model to currency and demand deposits in the u s a suggest that the price stabilizing reserve ratio on demand deposits is approximately one half of the 12 currently mandated by the monetary control act of 1980 required reserves on deposits at financial institutions have two major economic aspects first reserves may be regarded as a tax on bank liabilities if the rate of return on reserves measured either explicitly or implicitly is less than the market rate of interest secondly reserves may be considered an important monetary instrument for controlling the value of monetary aggregates and ultimately such variables as prices interest rates and income 1 unfortunately there appears to be little agreement among economists either as to the optimal level of reserves or to the criteria for setting such reserves in order to achieve macroeconomic stability friedman 3 had formerly advocated 100 percent reserves on both time and demand deposits but recently 4 has claimed that uniformity of reserves on transactions balances is far more important than the level at which they are imposed 2 at the other end of the spectrum carson 1 has advocated abolishing required reserves on all deposits while poole and lieberman 11 have urged elimination of reserves on time deposits only if m1 is accepted as the money stock definition this paper develops a macroeconomic model where it is demonstrated that the levels of reserves which minimize the fluctuations of such ultimate economic variables as prices are in general quite different from those which stabilize various monetary aggregates these reserve levels which minimize price level fluctuations are determined primarily from the covariance structure of unanticipated disturbances influencing financial assets empirical estimation of asset disturbances for the united states suggests that these stabilizing levels of reserves on demand deposit are lower than those scheduled to prevail under the monetary control act of 1980

indivisibilities lotteries and monetary exchange we introduce lotteries randomized trading into search theoretic models of money in a model with indivisible goods and fiat money we show goods trade with probability 1 and money trades with probability where 1 iff buyers have sufficient bargaining power with divisible goods a nonrandom quantity q trades with probability 1 and again money trades with probability where 1 iff buyers have sufficient bargaining power moreover q never exceeds the efficient quantity not true without lotteries we consider several extensions designed to get commodities as well as money to trade with probability less than 1 and to illuminate the efficiency role of lotteries