An Econometric Study of Economic Growth, Energy and Exports in Mauritius: Implications for Trade and Climate Policy

Yıl 2012, Cilt: 2 Sayı: 4, 225 - 237, 01.12.2012

Riad Sultan

Öz

While electricity from fossil fuels is among a major source of greenhouse gases and global warming, it is also a key resource in the industrial sector geared towards exports and economic growth. This study attempts to examine the export-GDP nexus and electricity-GDP nexus in addition to a supplementary hypothesis between exports and electricity in Mauritius for the period of 1970-2009. An augmented neo-classical aggregate production model is used. The ARDL bounds test and the Johansen cointegration test confirm the existence of a long-run relationship between these variables. The multivariate Granger-causality analysis indicates that electricity and exports Granger-cause economic growth in the long-run. Electricity remains a significant causal variable in the short-run and is also found to lead exports. The empirical findings suggest that conserving electricity as a climate policy may not be conducive for exports and economic growth. The use of renewable sources for electricity may be the right option.

Anahtar Kelimeler

Growth, Exports, Electricity, Granger causality, Climate policy