The Effect of Renewable Energy Consumption on the Economic Growth of Selected Countries in the MENA Region: Application of the Panel Vector Autoregressive Model (Panel VAR)

Energy has always played a very important role in human life and is one of the factors that can make economic growth possible. Today, many countries are struggling to invest in new technologies by using renewable energy sources such as solar energy, wind energy, or water energy as their needed sources of energy, which, as compared to fossil fuels, generate lower environmental pollution. The purpose of this study was to evaluate the economic growth of the selected countries of the MENA region from renewable energy sources using the Panel Vector Autoregressive Model in the period of 1990-2015. The results of the study showed that the variable of the total energy produced from renewable sources has the largest share in explaining the changes in the economic growth of the countries under study and its explanatory value reaches 56% in the long run. Given the significant impact of renewable energy consumption on economic growth, suitable policies for renewable energy are needed to achieve a high level of production and social welfare. In this regard, granting financial incentives, establishing a fund for renewable energy by the government, and creating conditions for developing the renewable energy industry in the country could be solutions.