ARE SHOCKS TO ENERGY CONSUMPTION PERMANENT OR TEMPORARY? EVIDENCE FROM 182 COUNTRIES

Paresh Narayan () and Russell Smyth

No 06/05, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: This paper applies univariate and panel data unit root tests to annual panel data for 182 countries over the period 1979-2000 to examine the stationarity properties of per capita energy consumption. The univariate unit root test can only reject the unit root null for 29 per cent of the countries at the 10 per cent level or better without a trend and 37 per cent of the countries at the 10 per cent level or better with a trend. However, it is often argued that unit root tests have low power with short spans of data and therefore failure to reject the unit root null should be treated with caution. When we apply the panel data unit root test we find overwhelming evidence that energy consumption is stationary. We discuss the implications of these findings for econometric modeling and policy formulation.

Keywords: Energy consumption; Unit roots; Panel data (search for similar items in EconPapers)
Pages: 18 pages
Date: 2005-05-01
New Economics Papers: this item is included in nep-cba and nep-ene
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Are shocks to energy consumption permanent or temporary? Evidence from 182 countries (2007)
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