Causality between energy consumption and economic growth in India: a note on conflicting results

This note examines the different direction of causal relation between energy consumption and economic growth in India. Applying Engle-Granger cointegation approach combined with the standard Granger causality test on Indian data for the period 1950-1996, we find that bi-directional causality exists between energy consumption and economic growth. Further, we apply Johansen multivariate cointegration technique on the different set of variables. The same direction of causality exists between energy consumption and economic growth. This is different from the results obtained in earlier studies. (C) 2004 Elsevier B.V. All rights reserved.