Abstract

In this paper we examine the causal relationship between electricity consumption, exports and economic growth in the DRC, using the newly developed ARDL-bounds testing approach. In order to account for the omission-of-variable bias, the study incorporates exports as an intermittent variable between electricity consumption and economic growth – thereby creating a simple multivariate model. The empirical results of this study show that, while both electricity consumption and economic growth Granger-cause each other in the short run; in the long run, it is economic growth that Granger-causes electricity consumption in the DRC. This finding has important policy implications, as it indicates that the DRC's long-term economic growth is not fully dependent on the electricity consumption. This implies that in the long run, the country could successfully pursue electricity conservation measures – without necessarily stifling its economic growth.

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