Abstract
GDP, Electricity Consumption and Financial Development in Croatia: an Empirical Analysis
Highlights
Given the undisputed theoretical and practical importance of energy, including electricity, it can be stated that this factor represents an important foundation for economic growth and development
This paper examines the relationship between economic growth, total electricity consumption and financial development in Croatia using the annual data covering the period 1995 – 2019
Our estimation results indicate the existence of unidirectional causality running from economic growth to total electricity consumption and from financial development to economic growth
Summary
Given the undisputed theoretical and practical importance of energy, including electricity, it can be stated that this factor represents an important foundation for economic growth and development. Because it improves the productivity of labour, capital, technology and other production factors, and due to the fact that increased consumption of energy, primarily electricity (as its most flexible, commercial and purest form and a key infrastructural input in the socio-economic development), affects economic growth. Economic growth models explicitly do not contain energy variable(s), during the last 20 years a number of empirical research papers have addressed the causality between electricity consumption and economic growth. Financial development has become a part of the equation
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