Causality Relationship between Real GDP and Electricity Consumption in Romania (2001-2010)

Selim Kayhan (), Uğur Adiguzel (), Tayfur Bayat () and Fuat Lebe
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Selim Kayhan: Bozok University, Faculty of Economics and Administrative Sciences
Uğur Adiguzel: Bozok University, Faculty of Economics and Administrative Sciences
Tayfur Bayat: Adiyaman University, Besni Vocational School

Journal for Economic Forecasting, 2010, issue 4, 169-183

Abstract: After Industrial Revolution, importance of energy in production has increased. As a result of two petroleum crisis, energy was included directly into the production function. While development level of countries has increased, energy consumption has also raised. Substantial increase in energy consumption with economic growth provide a motivation to investigate questions “Is there is a relationship between energy consumption and economic growth?” and if there is “What kind of relationship exists between them?”. The aim of this study is to analyse dynamic causal relationship between electricity consumption and economic growth in the Romanian economy for the period of 2001 – 2010 to answer this question. To this end, we utilize the Dolado – Lütkepohl, Tado - Yamamoto and traditional Granger causality tests. In this regard, we use Phillips – Perron and Dickey Fuller – GLS unit root tests and Bai – Perron multiple structural breaks test. Results support that causality runs from electricity consumption to economic growth in the case of Romania economy.

Keywords: Electricity Consumption; Economic Growth; Causality Test; Romania (search for similar items in EconPapers)
JEL-codes: C32 O41 Q43 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2010:i:4:p:169-183

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