Journal of the Korean Society of Mineral and Energy Resources Engineers ISSN:2288-0291(Print) 2288-2790(Online) 한국자원공학회지

The purpose of this paper is to investigate the causal relationship between electricity consumption and economic growth among the ASEAN 4 members, namely Indonesia, Malaysia, Singapore, and Thailand, and to obtain the policy implications of the results. To this end, we attempted to provide more careful consideration of the causality issues by applying time series techniques of Granger-causality over the period 1971-2002. Tests for unit roots, cointegration, and Granger-causality are presented. The results indicate that there is a bi-directional causality between electricity consumption and economic growth in Malaysia and Singapore. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in these two countries. However, uni-directional causality runs from economic growth to electricity consumption in Indonesia and Thailand without any feedback effect. Thus, electricity conservation policies can be initiated without causing negative economic side effects in these two countries.