Abstract
This study provides new evidence regarding the nonlinear relationship between energy consumption and economic growth in the Middle East and North Africa (MENA) region for the 1990–2014 period. The empirical estimation is conducted using a dynamic panel threshold model. We found one threshold in the relationship between energy consumption and economic growth and one threshold in the relationship between carbon dioxide (CO2) emissions and economic growth. The results indicate that energy consumption positively and significantly affects economic growth in the low energy consumption regime. In contrast, it has a negative and significant impact on economic growth in the high energy consumption regime. Moreover, CO2 emissions are positively and significantly related to economic growth in the low regime of CO2 emissions. Nevertheless, the relationship between CO2 emissions and economic growth in the high CO2 emissions regime is negative and significant. Therefore, policymakers should implement other effective energy policies, such as stricter regulations on CO2 emissions, increase energy efficiency, and replace fossil fuels with cleaner energy sources to avoid unnecessary CO2 emissions and combat global warming. Future studies should identify the root causes of failures and issues in real time for inflation and link the energy–growth nexus to achieving the 2030 Sustainable Development Goals (SDGs) Agenda, Goal 7: Affordable and Clean Energy.
Highlights
The relationship between energy usage and economic growth has been widely debated by many researchers and decisionmakers for several years, given the importance of energy factors in the production process since the oil crisis in 1970
In terms of the impact of energy use on economic growth at a certain point, the estimated energy consumption (ENPC) threshold level and the related 95 percent confidence interval are shown in the upper half of Table 2
The marginal impact of ENPC on GROWTH in the low energy consumption regime is represented by β 1, whereas the marginal impact of ENPC on GROWTH in the high energy consumption regime is represented by β2
Summary
The relationship between energy usage and economic growth has been widely debated by many researchers and decisionmakers for several years, given the importance of energy factors in the production process since the oil crisis in 1970. Authors of [1] conducted the first study demonstrating the importance of the relationship between energy usage and economic growth. They found a one-way causal relation between energy usage and economic growth in the USA. Studying this relationship may help governments design their energy policies to boost economic growth, as numerous studies have found that energy consumption causes economic growth [2,3,4,5]. The source of energy production is the main concern, as many countries use fossil fuels such as coal and natural gas as energy sources
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