Causality Between Energy and Output in the Long-Run
David Stern () and
No 126, Lund Papers in Economic History from Lund University, Department of Economic History
Though there is a very large literature examining whether energy use Granger causes economic output or vice versa this literature is fairly inconclusive. Almost all existing studies use relatively short time series or panels with a relatively small time dimension. Additionally, many recent papers continue to use what seem to be misspecified models. We apply Granger causality and cointegration techniques to a Swedish time series data set on energy and economic growth spanning 150 years to test whether increases in energy use and energy quality have driven economic growth. We show that these techniques are very sensitive to variable definition, choice of additional variables in the model, and sample periods. All of the following appear to make a finding that energy causes growth more likely: using multivariate models, defining variables to better reflect their theoretical definition, using larger samples, and including appropriate structural breaks. However, it is also possible that the relationship between energy and growth has changed over time and that results from recent smaller samples reflect this. Energy prices have a significant causal impact on both energy use and output.
Keywords: Energy; macroeconomics; Granger causality; cointegration; causality; time series (search for similar items in EconPapers)
JEL-codes: C32 C52 Q43 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (57) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.ekh.lu.se/media/ekh/forskning/lund_papers_in_economic_history/126.pdf [301 Moved Permanently]--> https://www.ekh.lu.se/media/ekh/forskning/lund_papers_in_economic_history/126.pdf)
Journal Article: Causality between energy and output in the long-run (2013)
Working Paper: Causality Between Energy and Output in the Long-Run (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:luekhi:0126
Access Statistics for this paper
More papers in Lund Papers in Economic History from Lund University, Department of Economic History Department of Economic History, Lund University, Box 7083, S-220 07 Lund, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Tobias Karlsson ().