An Analysis of the Co-integration and Causality Relationship between Electricity Consumption and Gross Domestic Product (GDP) in the Developing Countries: An Empirical Study of Turkey

Ayhan Kapusuzoglu and Mehmet Baha Karan ()
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Mehmet Baha Karan: Hacettepe University, Postal: Hacettepe University, Faculty of Economics and Administrative Sciences, Department of Business Administration, Ankara, Turkey

Business and Economics Research Journal, 2010, vol. 1, issue 3, 57

Abstract: In this study, long term relationship and causality relationship between electricity consumption and gross domestic product in Turkey for the period 1975-2006 were investigated. As a result of the co-integration analysis made firstly in this study, the long term relationship between the electricity consumption and gross domestic product was found. According to the result of Granger causality analysis made in accordance with vector error correction model, it was determined that there was unidirectional causality relationship between electricity consumption and gross domestic product. According to the findings, it can be said that in the process of economic growth in Turkey, gross domestic product amount was an important variable which affected the electricity consumption positively in the long term and therefore it can be said that it is important to provide the primary energy sources used in electricity energy production and electricity energy in the long term and in time without any interaction for preventing the failures which may arise during the process of economic growth and for the stability of the economic production and consumption process.

Keywords: Electricity consumption; Gross domestic product; Economic growth; Co-integration; Causality (search for similar items in EconPapers)
JEL-codes: C32 Q43 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0013

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