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How Dependent is Growth from Primary Energy? The Dependency ratio of Energy in 33 Countries (1970-2011)

Gaël Giraud () and Zeynep Kahraman ()
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Gaël Giraud: PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, The Shift Project - Redesigning the Economy to Achieve Carbon Transition
Zeynep Kahraman: The Shift Project - Redesigning the Economy to Achieve Carbon Transition

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Except for specialized resource economics models, economics pays little attention to the role of energy in growth. This paper highlights basic difficulties behind the mainstream analytical arguments for this neglect, and provides an empirical reassessment of this role. We use an error correction model in order to estimate the long-run dependency ratio of output with respect to primary energy use in 33 countries between 1970 and 2011. Our findings suggest that this dependency is much larger than the usual calibration of output elasticity with respect to energy. This strong dependency is robust to the choice of various samples of countries and subperiods of time. In addition, we show that energy and growth are cointegrated and that primary energy consumption univocally Granger causes GDP growth. The latter confirms and extends the results on cointegration and causality between energy consumption and growth already obtained in Stern (2010)

Keywords: dependency ratio; output elasticity; energy; energy efficiency; error correction model; ratio de dépendance; élasticité de l'output; énergie; efficacité énergétique; modèle à correction d'erreur (search for similar items in EconPapers)
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Date: 2014-12
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Published in 2014

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