Multi-scale Causality between Energy Consumption and GNP in Emerging Markets: Evidence from Turkey

Atilla Cifter and Alper Ozun

MPRA Paper from University Library of Munich, Germany

Abstract: Tests results for causality between energy consumption and economic growth do not have a consensus in the financial economics literature. Empirical evidence varies on the economies examined and methodology employed. This paper proposes a wavelet analysis as a semi- parametric model for detecting multi-scale causality between electricity consumption and growth in emerging economies. Using wavelet analysis we find that in the short run there is feedback relationship between GNP and energy consumption, while in the long run GNP leads to energy consumption. Wavelet correlation between GNP and energy consumption is maximum at 3rd time-scale(5-8 years) and this shows that GNP effects electricity consumption maximally around 5-8 years later in the long-run. We also find that the magnitude of the wavelet correlation changes based on time-scales for GNP and energy consumption and thus indicate that GNP and energy consumption are fundamentally different in the long run.

Keywords: Economic Growth; Energy Consumption; Employment; Wavelets; Causality (search for similar items in EconPapers)
JEL-codes: C1 C32 Q43 (search for similar items in EconPapers)
Date: 2007-03-01
New Economics Papers: this item is included in nep-cwa and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2483

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