Energy consumption and economic growth: New insights into the cointegration relationship

Ansgar Belke, Frauke Dobnik and Christian Dreger

Energy Economics, 2011, vol. 33, issue 5, 782-789

Abstract: This paper examines the long-run relationship between energy consumption and real GDP, including energy prices, for 25 OECD countries from 1981 to 2007. The distinction between common factors and idiosyncratic components using principal component analysis allows to distinguish between developments on an international and a national level as drivers of the long-run relationship. Indeed, cointegration between the common components of the underlying variables indicates that international developments dominate the long-run relationship between energy consumption and real GDP. Furthermore, the results suggest that energy consumption is price-inelastic. Causality tests indicate the presence of a bi-directional causal relationship between energy consumption and economic growth.

Keywords: Energy; consumption; Panel; unit; roots; Panel; cointegration; Vector; error-correction; models; Granger; causality (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (262)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988311000417
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Energy Consumption and Economic Growth: New Insights into the Cointegration Relationship (2010)
Working Paper: Energy Consumption and Economic Growth – New Insights into the Cointegration Relationship (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:33:y:2011:i:5:p:782-789

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().