Revisiting Energy-GDP Nexus for the Selected Countries of the Middle East Region

This paper investigates the relationship between total energy consumption and GDP in six countries of the Middle East , including Iran,Pakistan,Saudi Arabia,Oman,Bahrain and the United Arab Emirates. The data are annual and spanning the period ۱۹۸۰-۲۰۱۲.We employed Hsiao’s (۱۹۸۱) methodology to examine causality relation between total energy consumption and GDP.The empirical findings show a unidirectional causality relation between total energy consumption and GDP for Iran running from energy to GDP,and supports the growth hypothesis for Iran. For Saudi Arabia there is a unidirectional causality running from GDP to total energy consumption. Therefore we can accept conservation hypothesis about Saudi Arabia.There is bidirectional causality relation for other countries which support the feedback hypothesis about them.

Keywords:

Energy consumption , GDP , Middle East , Causality relation