Electric power consumption in high-income countries as catalyst for sustainable development: empirical evidence from generalized quantile regression

This paper investigates the nature of the effects of electric power consumption on economic growth for 41 high-income countries. It introduces a heterodox growth model, which integrates economic capabilities and economic structure into the energy consumption–economic growth nexus. The study leverages on the dynamic pooled ordinary least squares, dynamic fixed effects, system-GMM, the panel autoregressive distributed lag, and the generalized quantile regression estimations as estimation techniques. Empirical findings suggest that electric power consumption, human capital, and technological progress are positively associated with a higher rate of economic growth. Moreover, the study revealed that an increase in the level of capabilities of an economy can promote new incentives for employed people to raise their skills, and thus increases economic progress. In that sense, it is worth important to argue that the changes in the income level of any country may be reflected by the changes in the level of consumption of electric power along with the changes in the level of capabilities of an economy.