Electricity Consumption and Economic Growth in Vietnam: A Cointegration and Causality Analysis

Abstract:Using a cointegration and causality analysis, this paper investigates the causal relationship between electricity consumption and economic growth in Vietnam dur- ing the period of 1975-2010. Empirical results show that there is no causality effect of per capita electricity consumption on per capita Gross domestic products (GDP) in both the short-run and long-run, but a causality relationship running from per capita GDP to per capita electricity consumption in the long-run. This result is help- ful to understand the roles of economic growth on making energy policies in Vietnam to deal with the current electricity shortage accompanied with economic growth and to ensure national energy security.