Are energy consumption and economic growth characterised by nonlinearities? Evidence from selected African countries

The paper utilises the non-parametric triple test, the Bai-Perron test, and the KSS test to examine whether the paths of energy consumption and economic growth for 19 African countries are characterised by asymmetries, structural breaks, and nonlinear persistence over the period 1971-2011. We find evidence of deepness and steepness asymmetries, structural breaks, and nonlinear persistence in energy consumption and economic growth for these countries. The main implications of these findings are that: 1) the findings of studies which examine these variables for these countries in linear settings may have to revisit the issue by using nonlinear techniques; 2) it is possible that forecasts of energy consumption and economic growth for these countries which rely on linear models may contain forecasting errors. We recommend that future research on these variables should attempt to account for these nonlinearities in order to report more efficient estimates.