Energy Consumption and Economic Growth in Nigeria: A Causality Analysis

Abstract

The paper is set out to re-examine the causal relationship between energy consumption and economic growth using Nigeria’s data from 1980 to 2011 in a multivariate frameworkby including labour and capital in the causality analysis. Applying Granger causality test, impulse response and variance decomposition analysis; the results of the causality test reported absence of causality and that of variance decomposition found that capital and labourare more important in affecting output growth compared to energy consumption.

Keywords: Capital, Causality, Economic growth, Energy consumption, Labour