The causal relationship between electricity consumption and economic growth across states in the U.S.

This paper examines the causal relationship between electricity consumption and economic growth acrossfifty states in the United States. Only one study has investigated the relationship under the same study scope in theliterature. Using panel data of fifty states over the period from 1990 to 2017, the result shows that in the long run, a 1%increase in per capita electricity consumption (EC) significantly increases per capita gross domestic product (GDP) by0.85% (1.19%, 2.57%) by applying panel dynamic least squares (DOLS), panel fully modified least squares method(FMOLS), and panel autoregressive distributed lag (ARDL) model respectively. The positive impact of electricityconsumption on economic growth also holds in the short run. However, this relationship is both positive and negative forspecific state estimation. The causality test result also shows a uni-directional causality that runs from electricityconsumption to economic growth.