Energy consumption and real GDP: Panel co-integration and causality tests for sub-Saharan African countries

Abstract

This paper investigates the causal relationship between energy consumption and real GDP in 14 Sub-Saharan African countries over the period 1971–2004. The results of panel co-integration tests showed that energy consumption and real GDP do not have a stable long-run equilibrium relationship. We find that for all members of the panel, there is homogenous causality from energy consumption to real GDP and vice versa. This bi-directional causality supports the feedback hypothesis.