Causal relationship between fossil fuel consumption and economic growth in Japan: a multivariate approach

Hazuki Ishida ()
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Hazuki Ishida: Faculty of Symbiotic Systems Science, Fukushima University

No 11-13, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: Fossil fuels (oil, coal, gas) are low-entropy natural resources which seem to be indispensable for our economic prosperity. This paper investigates the relationship between fossil fuel consumption and economic growth in Japan, using a multivariate model of fossil fuels, non-fossil energy, labor and GDP. Using the Johansen cointegration technique, the empirical results indicate that there is a long-run relationship among the variables. Then using vector error correction model, the study reveals unidirectional causality running from fossil fuels to GDP. It implies that decline in fossil fuel consumption may hamper economic growth. On the other hand, non-fossil energy use does not appear to have positive effects on economic growth.

Keywords: Fossil fuels; Economic growth; Cointegration; Granger causality (search for similar items in EconPapers)
JEL-codes: Q32 Q43 Q57 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2011-04
New Economics Papers: this item is included in nep-ene, nep-env and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1113

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