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Is There Really Granger Causality Between Energy Use and Output?

Stephan B. Bruns, Christian Gross and David I. Stern
Authors registered in the RePEc Author Service: David I. Stern ()

The Energy Journal, 2014, vol. Volume 35, issue Number 4

Abstract: We carry out a meta-analysis of the very large literature on testing for Granger causality between energy use and economic output to determine if there is a genuine effect in this literature or whether the large number of apparently significant results is due to publication or misspecification bias. Our model extends the standard meta-regression model for detecting genuine effects in the presence of publication biases using the statistical power trace by controlling for the tendency to over-fit vector autoregression models in small samples. Granger causality tests in these over-fitted models have inflated type I errors. We cannot find a genuine causal effect in the literature as a whole. However, there is a robust genuine effect from output to energy use when energy prices are controlled for.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Is There Really Granger Causality Between Energy Use and Output? (2013) Downloads
Working Paper: Is There Really Granger Causality Between Energy Use and Output? (2013) Downloads
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