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Electricity supply, employment and real GDP in India: evidence from cointegration and Granger-causality tests

Authors
Journal
Energy Policy
0301-4215
Publisher
Elsevier
Publication Date
Volume
37
Issue
8
Identifiers
DOI: 10.1016/j.enpol.2009.03.022
Keywords
  • Electricity
  • India
  • Ardl
Disciplines
  • Economics

Abstract

Abstract This study probes nexus between electricity supply, employment and real GDP for India within a multivariate framework using autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Long-run equilibrium relationship has been established among these variables for the time span 1970–71 to 2005–06. The study further establishes long- and short-run Granger causality running from real GDP and electricity supply to employment without any feedback effect. Thus, growth in real GDP and electricity supply are responsible for the high level of employment in India. The absence of causality running from electricity supply to real GDP implies that electricity demand and supply side measures can be adopted to reduce the wastage of electricity, which would not affect future economic growth of India.

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