Causality between energy and output in the long-run

David Stern and Kerstin Enflo

Energy Economics, 2013, vol. 39, issue C, 135-146

Abstract: Though there is a very large literature examining whether energy use Granger causes economic output or vice versa, it is fairly inconclusive. Almost all existing studies use relatively short time series, or panels with a relatively small time dimension. We apply Granger causality and cointegration techniques to a Swedish time series dataset spanning 150years to test whether increases in energy use and energy quality have driven economic growth or vice versa. We show that these techniques are very sensitive to variable definition, choice of additional variables in the model, sample periods and size, and the introduction of structural breaks. The relationship between energy and growth may also have changed over time – energy causes output in the full sample while output causes energy use in recent smaller samples. Energy prices have a more robust causal impact on both energy use and output.

Keywords: Energy; Macroeconomics; Granger causality; Cointegration; Sweden (search for similar items in EconPapers)
JEL-codes: C32 C52 Q43 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (77)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988313000935
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Causality Between Energy and Output in the Long-Run (2013)
Working Paper: Causality Between Energy and Output in the Long-Run (2013)
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:39:y:2013:i:c:p:135-146

DOI: 10.1016/j.eneco.2013.05.007

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 ().