WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 20, 2023
The Asymmetric Impact of Informal Economy in the Energy-Economic Growth Nexus in Saudi Arabia
Authors: Zouheyr Gheraia, Hanane Abdelli, Raja Hajji, Mehdi Abid
Abstract: At the macroeconomic level, the question of the informal sector is the most debated. This paper studies the relationship between the informal economy (IFGDP), formal economy (FGDP), total economy (TGDP), and energy consumption (EC) in Saudi Arabia. The Nonlinear Distributed Autoregressive Model (NARDL) is used as an estimation technique on annual data ranging from 1970 to 2017. The empirical results confirm the relationships between variables that are asymmetric. Positive and negative shocks on FGDP, TGDP and IFGDP have positive effects on EC. The results will help policymakers and government officials have a better understanding of the effect of the IFGDP on energy demand and FGDP in Saudi Arabia’s development.