Economic growth and electricity consumption in former Soviet Republics

This study estimates the causal relationship between electricity consumption and economic growth with annual data for the Commonwealth Independent States countries in three groups of income levels. Empirical results reveal that electricity consumption and GDP are cointegrated for all these countries. Furthermore, there is a unidirectional causality from electricity consumption to GDP for all groups in the long run. Effect of electricity consumption on the GDP is negative for the second group of countries which supports the energy conservation policies, whereas it is positive for the first and third group of countries which supports the growth hypothesis.

► Causality between growth and electricity consumption is important for energy policies. ► We have estimated the income elasticities of electricity demand. ► We have found that income elasticities differ for countries.