Energy Consumption in the GCC Countries: Evidence on Persistence

21 Pages Posted: 21 Feb 2019

See all articles by Guglielmo Maria Caporale

Guglielmo Maria Caporale

Brunel University London - Department of Economics and Finance; London South Bank University; CESifo (Center for Economic Studies and Ifo Institute); German Institute for Economic Research (DIW Berlin)

Luis A. Gil-Alana

University of Navarra - Department of Economics

Manuel Monge

affiliation not provided to SSRN

Date Written: 2019

Abstract

This paper examines the statistical properties of energy consumption in the GCC countries applying fractional integration methods to annual data from 1980 to 2014. The results indicate that both the raw and the logged series exhibit a (statistically significant) linear time trend in the case of Bahrain, Oman and Qatar, and the raw series only in the case of Saudi Arabia. Mean reversion (i.e., statistical evidence of d < 1) is found in the case of Bahrain for both the raw and logged data, and in Qatar for the logged series. In the remaining cases, the I(1) hypothesis cannot be rejected except for the logged data in Saudi Arabia, since d is found to be statistically higher than 1 in that country. The implication of these findings is that in the case of Bahrain and Qatar exogenous shocks to energy consumption have transitory effects, which disappear in the long run without the need for policy action, whilst the permanent nature of the effects of shocks elsewhere means that appropriate policies have to be designed to restore equilibrium.

Keywords: fractional integration, energy consumption, GCC countries

JEL Classification: C000, C220, E210, Q400

Suggested Citation

Caporale, Guglielmo Maria and Gil-Alana, Luis A. and Monge, Manuel, Energy Consumption in the GCC Countries: Evidence on Persistence (2019). CESifo Working Paper No. 7470, Available at SSRN: https://ssrn.com/abstract=3338824

Guglielmo Maria Caporale (Contact Author)

Brunel University London - Department of Economics and Finance ( email )

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HOME PAGE: http://www.brunel.ac.uk/about/acad/bbs/bbsstaff/ef_staff/guglielmocaporale/

London South Bank University ( email )

Centre for Monetary and Financial Economics
London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Luis A. Gil-Alana

University of Navarra - Department of Economics ( email )

Campus de Arrosadia
Pamplona, 31006
Spain

Manuel Monge

affiliation not provided to SSRN

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