The impact of electricity prices on ecinomic growth: A case study of South Africa
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Date
2015-05
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University of Fort Hare
Abstract
This study examines the impact of electricity prices on economic growth in South Africa using Vector Error Correction Model (VECM) and the Johansen approach to co-integration. The
results confirm that a stable, long-run relationship exists between electricity prices and economic growth. The empirical results show that there is a unique negative long-run relationship between electricity prices and economic growth. We find that higher electricity prices have a negative impact on economic growth. This indicates that as electricity prices increase, aggregate output in the economy will become constricted thereby reducing gross domestic product and thus reducing economic growth in South Africa.
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Keywords
TECHNOLOGY::Industrial engineering and economy::Industrial organisation, administration and economics
Citation
Mazambani,N.M.(2015).The impact of electricity prices on ecinomic growth: A case study of South Africa.Alice: University of Fort Hare