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Examining the Linkages Between Financial Development and Energy Consumption in India

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Current Issues in the Economy and Finance of India (ICEF 2018 2018)

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Abstract

This paper examines the long-run equilibrium and the existence of the causal relationship between financial development, energy consumption, economic growth and FDI in India for the period 1978–2014. The Johansen-Juselius maximum likelihood procedure in the multivariate framework and Granger causality in the vector error correction framework (VECM) is employed to examine the co-integration and causal association between the considered variables. The results of Johansen-Juselius co-integration test shows that there is long-run equilibrium relationship among variables. We also find that there is no long-run causality between the variables, but there exists bi-directional short-run causality between financial development and energy consumption in India . Based on these results, suitable growth policies are also discussed for India .

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Notes

  1. 1.

    Vector Auto-Regression. See Sims (1972, 1980).

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Author information

Authors and Affiliations

  1. Department of Economics Sciences, IIT Kanpur, Kanpur, India

    Seema Saini

  2. Department of Economics, Banaras Hindu University, Varanasi, India

    Yadawananda Neog

Authors
  1. Seema Saini
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  2. Yadawananda Neog
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Corresponding author

Correspondence to Yadawananda Neog .

Editor information

Editors and Affiliations

  1. Department of Economics, Birla Institute of Technology and Science (BITS), Pilani, Goa, India

    Aswini Kumar Mishra

  2. Trulaske College of Business, School of Accountancy, University of Missouri, Columbia, MO, USA

    Vairam Arunachalam

  3. Department of Economics, Birla Institute of Technology and Science (BITS), Pilani, Goa, India

    Debasis Patnaik

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Saini, S., Neog, Y. (2018). Examining the Linkages Between Financial Development and Energy Consumption in India. In: Mishra, A., Arunachalam, V., Patnaik, D. (eds) Current Issues in the Economy and Finance of India. ICEF 2018 2018. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-99555-7_8

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