Renewable energy and growth: Evidence from heterogeneous panel of G7 countries using Granger causality

Tsangyao Chang, Rangan Gupta, Roula Inglesi-Lotz, Beatrice Desiree Simo-Kengne (), Devon Smithers and Amy Trembling

Renewable and Sustainable Energy Reviews, 2015, vol. 52, issue C, 1405-1412

Abstract: In this paper we examine the causal relationship between renewable energy consumption and economic growth across the G7 countries, using annual data for the period of 1990–2011. By employing the causality methodology proposed by Emirmahmutoglu and Kose (2011) [8], we investigate if there is a causal relationship between the variables. The advantage of this methodology is that it takes into account possible slope heterogeneity and cross-sectional dependency in a multivariate panel. The empirical results support the existence of a bi-directional causal relationship between economic growth and renewable energy for the overall panel. However, looking at the individual results for each country, the neutrality hypothesis is confirmed for Canada, Italy and the US; while for France and UK there is a unidirectional causality from GDP to renewable energy, and the opposite for Germany and Japan.

Keywords: Renewable energy; Economic growth; G7 countries; Panel causality (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (81)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:52:y:2015:i:c:p:1405-1412

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DOI: 10.1016/j.rser.2015.08.022

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