What is it about?
This paper investigates the dynamic causal relationship between energy consumption, human capital investment and economic growth in South Africa for the period 1960–2015 within the vector error correction model (VECM) framework.
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Why is it important?
Identifying the dynamic interaction between domestic infrastructure inves tment, energy consumption and economic growth remains central to South Africa’ s economic policy debate not only because the country’s econom y is highly energy-intensive, but also due to the growing economic activities which require more informed investment decisions. This justifies the need for this study which is aimed at analysing the dynamic relationship that exists between the variables. We further disaggregate the infrastructure investment into economic and social infrastructure so as to determine the major driver of the economy using the vector error correction model. This will help in the prioritization of investment decision given the declining rate of economic growth in recent years and the need to boost growth.
Perspectives
This study is very important for the South African government and other policy makers as it gives insight on why they need to give priority to the implementation of policies that are aimed at public empowerment so that they can support the economy instead of depending on the economy.
Dr Kehinde Damilola Ilesanmi
University of Zululand
Read the Original
This page is a summary of: Energy consumption, human capital investment and economic growth in South Africa: a vector error correction model analysis, OPEC Energy Review, March 2017, Wiley,
DOI: 10.1111/opec.12094.
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