Energy consumption and GDP in Italy: cointegration and causality analysis

Cosimo Magazzino ()

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2015, vol. 17, issue 1, 137-153

Abstract: The aim of this article was to assess the empirical evidence of the nexus between GDP and energy consumption for Italy during the period 1970–2009, using a time series approach. After a brief introduction, a survey of the economic literature on this issue is shown, before discussing the data and introducing some econometric techniques. Stationarity tests reveal that both series are nonstationary, or I(1). Moreover, a cointegration relationship is found between the two variables. The short-run dynamics of the variables show that the flow of causality runs from energy use to GDP, and there is a long-run bidirectional causal relationship (or feedback effect) between the two series. Consequently, we conclude that energy is a limiting factor to GDP growth in Italy and that energy conservation policy should be formulated and implemented wisely. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: Energy policies; Energy consumption; GDP; Stationarity; Cointegration; Causality; Italy; B22; C22; N54; Q43 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (21)

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DOI: 10.1007/s10668-014-9543-8

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