Coal consumption and industrial production nexus in USA: Cointegration with two unknown structural breaks and causality approaches
Ertugrul Yıldırım (),
Alper Aslan () and
Ilhan Ozturk ()
Renewable and Sustainable Energy Reviews, 2012, vol. 16, issue 8, 6123-6127
The paper investigates the causality relationships among industrial production index, coal consumption and employment in industrial sector for the period of 1973:1–2011:10 in USA. After noticing that there are breaks in the regression model, the Hatemi-J test for cointegration is employed to the cases that take into account two possible regime shifts. It is concluded that there is a long run relationship between industrial production and industrial coal consumption with the breaks at 1983:4 and 1998:4. We found a negative relationship between coal consumption and industrial production for the period of 1973:1–1983:4 and positive relationship for 1983:5–1998:4 period. For the last period that covers 1983:5–2011:10, the cointegration relationship turned to negative. In addition, the results show that causal relationship between coal consumption and industrial production changes over time.
Keywords: Industrial production; Energy consumption; Coal consumption; Cointegration with two breaks (search for similar items in EconPapers)
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