The Causal Relationship between Energy Consumption and GDP in Turkey
Ilhan Ozturk (),
Muhittin Kaplan and
Energy & Environment, 2013, vol. 24, issue 5, 727-734
This paper attempts to investigate the short-run and long-run relationship and causality between energy consumption and economic growth during 1960â€“2006 period for Turkey. Johansen and Juselius cointegration method and vector error correction model (VECM) have been employed to examine this issue. After finding cointegration among variables, a VECM is estimated and the Granger causality tests were carried out based on a VECM. The results have shown that there is no short-run causality in both energy consumption and GDP models. The results also confirmed that there is unidirectional long-run causality among variables of interest and the direction of long-run causality is running from per capita GDP to per capita energy consumption. As a result, conservation hypothesis which postulates unidirectional causality from economic growth to energy consumption is confirmed for Turkey. Taken together, these empirical findings involve valuable information for policy makers.
Keywords: Energy consumption; Economic growth; Causality; Turkey (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:engenv:v:24:y:2013:i:5:p:727-734
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