Investigating the Relationship between Energy Consumption and Economic Growth Using Toda-Yamamoto Causality Test: The Case of Kazakhstan and Azerbaijan

Gulnar Lukhmanova (), Bauyrzhan Urazymbetov (), Akmaral Sarsenova (), Nazym Zaitenova (), Vilena Seitova (), Karlygash Baisholanova () and Artur Bolganbayev ()
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Gulnar Lukhmanova: Zhetysu University named after I. Zhansugurov, Taldykorgan, Kazakhstan
Bauyrzhan Urazymbetov: PhD candidate, Corvinus University of Budapest, Budapest, Hungary
Akmaral Sarsenova: International Taraz Innovative Institute named after Sherkhan Murtaza, Taraz, Kazakhstan
Nazym Zaitenova: University of International Business, Almaty, Kazakhstan
Vilena Seitova: M. Auezov South Kazakhstan University, Shymkent, Kazakhstan
Karlygash Baisholanova: Al-Farabi Kazakh National University, Almaty, Kazakhstan
Artur Bolganbayev: Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakhstan

International Journal of Energy Economics and Policy, 2024, vol. 15, issue 1, 374-383

Abstract: This study examines the relationship between energy consumption and economic growth in Kazakhstan and Azerbaijan using the Toda-Yamamoto causality test. Following their independence, both countries implemented significant structural reforms to transition to a market economy, recognizing the efficient use of energy resources as a strategic component for economic growth. Kazakhstan benefited from its abundant oil and natural gas reserves, resulting in an increased economic growth rate. In contrast, Azerbaijan fostered its economic development through a growth model centered on energy exports. The research analyzes the impact of oil and renewable energy consumption on economic growth through various models. The findings indicate a significant causal relationship between energy consumption and economic growth in Kazakhstan, while this relationship is not statistically significant in Azerbaijan. Consequently, the study concludes that energy consumption is a crucial factor for economic growth in Kazakhstan. Furthermore, the research explores how structural differences between energy consumption and economic growth influence the time needed to reach equilibrium. Results show that Kazakhstan achieves equilibrium in a shorter timeframe compared to Azerbaijan. This study aims to enhance the understanding of growth dynamics, particularly in energy-rich countries, by highlighting the effects of energy consumption on economic growth and the implications of different energy policies on this relationship.

Keywords: Toda-Yamamoto Causality Test; Energy Consumption; Economic Growth; Gross Domestic Product; Kazakhstan; Azerbaijan (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:15:y:2024:i:1:id:17797

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DOI: 10.32479/ijeep.17797

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