The Relationship between Energy Consumption and Output: A Frequency Domain Approach

This paper examines the causal relationship between energy consumption and economic growth in three African countries (i.e., Algeria, Egypt, and South Africa) from 1970 to 2011 using the frequency domain-based Granger causality test proposed by Lemmens et al. (2008). Our empirical results reveal a unidirectional causality, from energy consumption to economic growth, for Algeria, bi-directional causality between energy consumption and economic growth for Egypt, and no causality in any direction between energy consumption and economic growth for South Africa. Our findings provide important implications for energy policies and strategies in the three African countries.