Abstract

The aim of the research is to determine the direction of the causal relationship between economic growth and electricity production by using Iraq's annual data for the period (1971-2011). To achieve the objectives research, The Akaike Information Criterion was used to determine the deceleration periods. The Granger Causality test and Variation Decomposition also have applied. The results showed there is a one-way causal relationship from the economic growth to the production of electric power, and This relationship appears in long-run. The Variable (DGDP_PrC) which reflects economic growth which its data are stabilized at the first difference "D" in the fluctuations in electricity production which symbolizes it by (DD EL_ PRO) which its data are stabilized at the second difference "DD", Has contributed about 48% according to the analysis of the components of the variance, thus the research concluded that the increase in electricity production depends on economic growth and that the improvement in economic growth should be directed towards improving the production of the electricity sector.