Abstract
The existing literature on the linkage between Gross Domestic Product (GDP) and energy use in both industrialized and developing economies usually assumes that the impacts of gross domestic product changes are symmetric. In this study, we utilized nonlinear autoregressive distributed lag (NARDL) model and test whether or not the effect of variations in the gross domestic product on energy use is symmetric or asymmetric from the context of India. Using time series data over 1971-2014, the findings depict that the change in the gross domestic product has a symmetric effect on energy use both in short-run and the long-run. Our conclusions infer that there is no asymmetrical association between GDP and energy use, leading to support the symmetric impact of GDP on energy use.
Highlights
Along with globalization, energy becomes the most important inputs in the process of economic development
The existing literature on the linkage between Gross Domestic Product (GDP) and energy use in both industrialized and developing economies usually assumes that the impacts of gross domestic product changes are symmetric
The elasticity coefficient computed to indicate the association between economic growth and energy use both in strong and weak economies assume values approximately equal to one, which infers that a one percent upsurge in economic growth leads increase energy use by 100 percent in developing economies (Kapusuzoglu & Karan, 2012)
Summary
Energy becomes the most important inputs in the process of economic development. The elasticity coefficient computed to indicate the association between economic growth and energy use both in strong and weak economies assume values approximately equal to one, which infers that a one percent upsurge in economic growth leads increase energy use by 100 percent in developing economies (Kapusuzoglu & Karan, 2012). The elasticity coefficient estimated between the demand for energy use and GDP is relatively less than one for developing economies. The difference between developed and developing economies from the Manzoor Ahmad, Zia Ullah Khan & Shehzad Khan perspective of the association between the demand for energy (energy use) and economic growth generally stems from the continuously escalating need for energy in emerging economies (Dorsman et al, 2012)
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