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Does energy efficiency promote economic growth? Evidence from a multicountry and multisectoral panel dataset

Ashish Rajbhandari () and Fan Zhang

Energy Economics, 2018, vol. 69, issue C, 128-139

Abstract: We examine the causal relationship between energy efficiency and economic growth based on panel data for 56 high- and middle-income economies from 1978 to 2012. Using a panel vector autoregression approach, we find evidence of a long-run Granger causality from economic growth to lower energy intensity for all economies. We also find evidence of long-run bidirectional causality between lower energy intensity and higher economic growth for middle-income economies. This finding suggests that beyond climate benefits, middle-income economies may also earn an extra growth dividend from energy efficiency measures.

Keywords: Energy efficiency; Energy intensity; Economic growth; Panel cointegration; Granger causality; Vector autoregressions (search for similar items in EconPapers)
JEL-codes: C32 C33 O13 Q43 (search for similar items in EconPapers)
Date: 2018
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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