Abstract

This paper aims to explain the relationship between Gross Domestic Product (GDP) and energy consumption in Saudi Arabia; this is one of the most important emerging markets in the Middle East region. Moreover, this paper uses the Granger Causality test, to investigate over the period from 1970 to 2014 the nature of the co-integration between the variables of GDP and energy consumption. This is done to find out the direction of the relationship between GDP and energy consumption in Saudi Arabia. In this regard, we have come to the conclusion that, on the one hand, Saudi Arabia’s GDP has no causal effect on the country’s energy consumption. However, on the other hand, Saudi Arabia’s energy consumption has a causal effect on the country’s GDP.

This work is licensed under a Creative Commons Attribution 4.0 License.