Energy Consumption and Economic Growth Revisited: Structural Breaks and Cross-section Dependence

Frauke Dobnik

No 303, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper examines the causal relationship between real GDP and energy consumption for 23 OECD countries from 1971 to 2009. Using recently developed panel econometric techniques the present paper takes into account structural breaks and cross-section dependence when analysing the energy consumption-growth nexus. The empirical results of this study indicate that there exists a long-run equilibrium relationship between real GDP and energy consumption, and the impact of real GDP on energy consumption is larger than vice versa. Furthermore, the empirical evidence of a dynamic panel error-correction model reveals a bidirectional causal relationship between economic growth and energy consumption in both the short and long run.

Keywords: Energy consumption; panel unit roots and cointegration; structural breaks; cross-section dependence; panel error-correction model; Granger causality; Energy consumption; panel unit roots and cointegration; structural breaks; cross-section dependence; panel error-correction model; Granger causality (search for similar items in EconPapers)
JEL-codes: C23 C33 Q43 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:303

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