IDEAS home Printed from https://ideas.repec.org/a/ani/irdjoe/v4y2022i3p462-479.html
   My bibliography  Save this article

The Nexus among Energy Intensity, Energy Mix and Economic Performance in Europe: A Decomposition Analysis

Author

Listed:
  • Fatima Gulzar

    (PhD Scholar, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

  • Fatima Farooq

    (Associate Professor, School of Economics, Bahauddin Zakariya University, Multan, Pakistan)

Abstract

Using a versatile piecewise linear regression model, this study revisits the connection between energy intensity, energy mix, macroeconomic variables, and economic performance. The analysis determines a threshold effect of income growth on changes in energy intensity based on dynamic panel data for a collection of European economies from 1990 to 2020. The study builds on the three specifications: The Skelton model (M1), the human capital model (M2), and the policy model (M3). The Skelton model is a fundamental model that explains the energy economic relationship with energy use in many economic sectors and with various energies. Additionally, in M2, achieve basic and secondary education as human capital, investment, and commerce as models for policies (M3). Numerous diagnostic procedures are carried out to examine serial correlation, heteroscacity, and cross-sectional dependence. In order to evaluate the robustness of the results, the specification of the dynamic panel is put through the Generalized Method of Movement (GMM) regression framework. Although energy intensity and income growth are negatively correlated for the entire sample and study period, the rate of decline significantly slows after the level of per capita income reaches $5,000, by more than 30%. According to the analysis's findings based on index decomposition, structural change is crucial for intensity levels across all nations. Additionally, moving from fossil fuels to renewable energy sources has a positive correlation with economic success in terms of energy intensity. While increasing energy intensity spurs global growth because of the current state of environmentally friendly technological innovation.

Suggested Citation

  • Fatima Gulzar & Fatima Farooq, 2022. "The Nexus among Energy Intensity, Energy Mix and Economic Performance in Europe: A Decomposition Analysis," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(3), pages 462-479, September.
    • Handle: RePEc:ani:irdjoe:v:4:y:2022:i:3:p:462-479
    DOI: 10.52131/joe.2022.0403.0093
    as

    Download full text from publisher

    File URL: https://journals.internationalrasd.org/index.php/joe/article/view/901/570
    Download Restriction: no
    File URL: https://journals.internationalrasd.org/index.php/joe/article/view/901
    Download Restriction: no
    File URL: https://libkey.io/10.52131/joe.2022.0403.0093?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chris Bataille, Mark Jaccard, John Nyboer and Nic Rivers, 2006. "Towards General Equilibrium in a Technology-Rich Model with Empirically Estimated Behavioral Parameters," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 93-112.
    2. repec:dau:papers:123456789/10091 is not listed on IDEAS
    3. Díaz, Antonia & Marrero, Gustavo A. & Puch, Luis A. & Rodríguez, Jesús, 2019. "Economic growth, energy intensity and the energy mix," Energy Economics, Elsevier, vol. 81(C), pages 1056-1077.
    4. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    5. Harty D. Saunders, 1992. "The Khazzoom-Brookes Postulate and Neoclassical Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 131-148.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grossmann, Volker, 2008. "Risky human capital investment, income distribution, and macroeconomic dynamics," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 19-42, March.
    2. Pierre‐Richard Agénor, 2004. "Macroeconomic Adjustment and the Poor: Analytical Issues and Cross‐Country Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 18(3), pages 351-408, July.
    3. Boukraine, Wissem, 2020. "The finance-inequality nexus in the BRICS countries: evidence from an ARDL bound testing approach," MPRA Paper 101976, University Library of Munich, Germany.
    4. Schweinberger, Albert G., 2001. "Capital, heterogeneous labour, global goods markets and unemployment," Discussion Papers, Series I 309, University of Konstanz, Department of Economics.
    5. Gelaw, Fekadu, 2009. "The Relationship Between Poverty, Inequality, and Growth in the Rural Ethiopia: Micro Evidence," 2009 Conference, August 16-22, 2009, Beijing, China 51915, International Association of Agricultural Economists.
    6. Hrushikesh Mallick, 2008. "Do remittances impact the economy? Some empirical evidences from a developing economy," Centre for Development Studies, Trivendrum Working Papers 407, Centre for Development Studies, Trivendrum, India.
    7. Günther Rehme, 2007. "Education, Economic Growth and Measured Income Inequality," Economica, London School of Economics and Political Science, vol. 74(295), pages 493-514, August.
    8. Michele Giammatteo, 2006. "Inequality in Transition Countries: The Contributions of Markets and Government Taxes and Transfers," LIS Working papers 443, LIS Cross-National Data Center in Luxembourg.
    9. Michael P. Keane & Eswar S. Prasad, 2002. "Inequality, Transfers, And Growth: New Evidence From The Economic Transition In Poland," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 324-341, May.
    10. Laetitia Comminges & Arnak Dalalyan, 2012. "Minimax Testing of a Composite null Hypothesis Defined via a Quadratic Functional in the Model of regression," Working Papers 2012-19, Center for Research in Economics and Statistics.
    11. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.
    12. Jang Ok Cho & Hyo-Youn Chu & Hyung Seok E. Kim & Jaywon Lee, 2016. "Productivity Distribution and Economic Growth," Korean Economic Review, Korean Economic Association, vol. 32, pages 23-40.
    13. Bilin Neyapti, 2018. "Income distribution and economic crises," International Finance, Wiley Blackwell, vol. 21(3), pages 273-296, December.
    14. Martin Larch, 2010. "Fiscal performance and income inequality: Are unequal societies more deficit-prone? Some cross-count," European Economy - Economic Papers 2008 - 2015 414, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    15. Dixon, Peter B. & Rimmer, Maureen & McDonald, Daina & McDaniel, Christine A. & Balistreri, Edward J. & Johnson, Kyle & Wong, Eina V., 2002. "USAGE: Data and Parameters," Conference papers 331021, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Li, Yating & Fei, Yinxin & Zhang, Xiao-Bing & Qin, Ping, 2019. "Household appliance ownership and income inequality: Evidence from micro data in China," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    17. Cristiano Perugini & Gaetano Martino, 2008. "Income Inequality Within European Regions: Determinants And Effects On Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 373-406, September.
    18. Paolo Seri, 2014. "The role of proximity in retrospective: organizations, ICT and human resources in Italian traditional districts? firms," Working Papers 1404, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2014.
    19. Niclas Berggren & Mikael Elinder, 2012. "Is tolerance good or bad for growth?," Public Choice, Springer, vol. 150(1), pages 283-308, January.
    20. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ani:irdjoe:v:4:y:2022:i:3:p:462-479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Muhammad Abrar ul Haq (email available below). General contact details of provider: https://journals.internationalrasd.org/index.php/joe/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.