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Energy-output nexus in Bangladesh: A two-sector model analysis()

The relationship between energy and output is one of the key issues in economic literature. Existing empirical studies have mainly used the neoclassical one-sector aggregate production function to examine the energy-output nexus and revealed inconclusive results. To address this issue, in this paper...

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Autores principales: Amin, Sakib Bin, Al Kabir, Foqoruddin, Khan, Farhan
Formato: Online Artículo Texto
Lenguaje:English
Publicado: The Author(s). Published by Elsevier Ltd. 2020
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7539948/
http://dx.doi.org/10.1016/j.esr.2020.100566
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author Amin, Sakib Bin
Al Kabir, Foqoruddin
Khan, Farhan
author_facet Amin, Sakib Bin
Al Kabir, Foqoruddin
Khan, Farhan
author_sort Amin, Sakib Bin
collection PubMed
description The relationship between energy and output is one of the key issues in economic literature. Existing empirical studies have mainly used the neoclassical one-sector aggregate production function to examine the energy-output nexus and revealed inconclusive results. To address this issue, in this paper, we develop a two-sector model differentiating the energy sector from the conventional production sector to study the energy-output linkage for the Bangladesh economy. Using the annual data from 1985 to 2018, we conduct several unit root tests and reveal that our variables are stationary at their first difference. We further use the Johansen-Juselius cointegration and the Autoregressive Distributed Lag (ARDL) bounds tests and find that the variables are cointegrated in the long-run. By using three robust estimators (Dynamic Ordinary Least Squares (DOLS), Fully Modified OLS (FMOLS), and Dynamic ARDL), we reveal that a 1% increase in energy can increase the output by 0.06–0.10% in the long-run. We also run the Granger causality test and Vector Error Correction Model (VECM) to check the long-run and short-run causality. Our results find a unidirectional causality running from energy to output in the long-run but not in the short-run. We recommend that a reliable supply of energy needs to be ensured for future sustainable development in Bangladesh.
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spelling pubmed-75399482020-10-08 Energy-output nexus in Bangladesh: A two-sector model analysis() Amin, Sakib Bin Al Kabir, Foqoruddin Khan, Farhan Energy Strategy Reviews Article The relationship between energy and output is one of the key issues in economic literature. Existing empirical studies have mainly used the neoclassical one-sector aggregate production function to examine the energy-output nexus and revealed inconclusive results. To address this issue, in this paper, we develop a two-sector model differentiating the energy sector from the conventional production sector to study the energy-output linkage for the Bangladesh economy. Using the annual data from 1985 to 2018, we conduct several unit root tests and reveal that our variables are stationary at their first difference. We further use the Johansen-Juselius cointegration and the Autoregressive Distributed Lag (ARDL) bounds tests and find that the variables are cointegrated in the long-run. By using three robust estimators (Dynamic Ordinary Least Squares (DOLS), Fully Modified OLS (FMOLS), and Dynamic ARDL), we reveal that a 1% increase in energy can increase the output by 0.06–0.10% in the long-run. We also run the Granger causality test and Vector Error Correction Model (VECM) to check the long-run and short-run causality. Our results find a unidirectional causality running from energy to output in the long-run but not in the short-run. We recommend that a reliable supply of energy needs to be ensured for future sustainable development in Bangladesh. The Author(s). Published by Elsevier Ltd. 2020-11 2020-10-07 /pmc/articles/PMC7539948/ http://dx.doi.org/10.1016/j.esr.2020.100566 Text en © 2020 The Author(s) Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Amin, Sakib Bin
Al Kabir, Foqoruddin
Khan, Farhan
Energy-output nexus in Bangladesh: A two-sector model analysis()
title Energy-output nexus in Bangladesh: A two-sector model analysis()
title_full Energy-output nexus in Bangladesh: A two-sector model analysis()
title_fullStr Energy-output nexus in Bangladesh: A two-sector model analysis()
title_full_unstemmed Energy-output nexus in Bangladesh: A two-sector model analysis()
title_short Energy-output nexus in Bangladesh: A two-sector model analysis()
title_sort energy-output nexus in bangladesh: a two-sector model analysis()
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7539948/
http://dx.doi.org/10.1016/j.esr.2020.100566
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AT khanfarhan energyoutputnexusinbangladeshatwosectormodelanalysis