Nowadays, increased attention is being paid to the causal relationship between electricity consumption and economic growth. This paper attempts to examine the causal relationship between electricity consumption and economic growth for China's Beijing-Tianjin-Hebei agglomeration, using annual data covering the period 1982–2008. In this study, unit root tests, the Johansen co-integration test, and the Granger causality test are applied. The empirical results indicate that the two series (electricity consumption and economic growth) of the three locales (Beijing, Tianjin, and Hebei) are non-stationary. But first differences of the two series are stationary. The results of the Johansen co-integration test indicate that electricity consumption and economic growth are co-integrated in Hebei and Tianjin while this is not the case in Beijing. The Granger causality test implies that there is causality running from electricity consumption to economic growth in all of the three locales. Causality running from economic growth to electricity consumption is found in Hebei and Beijing while this is not the case in Tianjin. This means that an increase in electricity consumption directly affects economic growth and that economic growth also stimulates further electricity consumption in Hebei and Beijing. But in Tianjin, an increase in electricity consumption directly affects economic growth while economic growth cannot affect electricity consumption. These findings can provide useful information for local governments of the three locales to formulate sustainable energy and economic policies. The study is of great significance for circular economy and building a resource-conserving society.
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