Modelling Primary Energy Consumption under Model Uncertainty

Zsuzsanna Csereklyei and Stefan Humer ()

No 147, Department of Economics Working Paper Series from WU Vienna University of Economics and Business

Abstract: This paper examines the long-term relationship between primary energy consumption and other key macroeconomic variables, including real GDP, labour force, capital stock and technology, using a panel dataset for 64 countries over the period 1965-2009. Deploying panel error correction models, we find that there is a positive relationship running from physical capital, GDP, and population to primary energy consumption. We observe however a negative relationship between total factor productivity and primary energy usage. Significant differences arise in the magnitude of the cointegration coefficients, when we allow for differences in geopolitics and wealth levels. We also argue that inference on the basis of a single model without taking model uncertainty into account can lead to biased conclusions. Consequently, we address this problem by applying simple model averaging techniques to the estimated panel cointegration models. We find that tackling the uncertainty associated with selecting a single model with model averaging techniques leads to a more accurate representation of the link between energy consumption and the other macroeconomic variables, and to a significantly increased out-of-sample forecast performance.

Keywords: energy consumption; panel cointegration models; model averaging; Energieverbrauch; Bevölkerungsentwicklung; Realeinkommen; Kapitalstock; technischer Fortschritt; Faktorproduktivität; Kointegration (search for similar items in EconPapers)
Date: 2012-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://epub.wu.ac.at/3706/ original version (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://epub.wu.ac.at/3706/ [308 PERMANENT REDIRECT]--> https://epub.wu.ac.at/id/eprint/3706 [302 FOUND]--> https://research.wu.ac.at/en/publications/53e71266-b78a-499f-b9c6-41232b314d77)

Related works:
Working Paper: Modelling Primary Energy Consumption under Model Uncertainty (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wiw:wus005:3706

Access Statistics for this paper

More papers in Department of Economics Working Paper Series from WU Vienna University of Economics and Business Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by WU Library ().