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Elasticity of Energy Intensity on a Regional Scale: An Empirical Study of International Trade Channel

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  • Dmitry Burakov

    (Department of Monetary Relations and Monetary Policy, Russian Federation, Financial University under the Government of Russian Federation, Moscow, Russia.)

Abstract

This study examines the relationship between energy intensity in different world regions. To explain relationship between them we test a hypothesis of international trade channel and determine degree of sensitivity of national economy s energy intensity to actions of major competitors in export market. Based on data of energy intensity for more than 150 countries for the period from 1980 to 2011, using regression analysis, we built a number of unrestricted vector autoregression models refl ecting relationship between energy intensity of different regions, and relationship between groups of economies, primary source of exports for which is fuel or engineering sector. To characterize elasticity of energy intensity in sampled countries, we use variance decomposition and impulse response techniques. The study shows the presence of a stable relationship between energy intensity for different regions of the world. Testing interlinkages between energy intensity of economies exporting raw materials (e.g. oil) and engineering production, for trade channel, confi rms its existence. The sensitivity of economies exporting raw materials to shocks in energy intensity tends to be signifi cantly lower than in economies exporting consumer goods.

Suggested Citation

  • Dmitry Burakov, 2016. "Elasticity of Energy Intensity on a Regional Scale: An Empirical Study of International Trade Channel," International Journal of Energy Economics and Policy, Econjournals, vol. 6(1), pages 65-75.
    • Handle: RePEc:eco:journ2:2016-01-10
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    References listed on IDEAS

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    Cited by:

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    2. Gennady Osipov & Svetlana Karepova & Elena Chizhevskaya & Maxim Gnatyuk & Alexander Semin & Oksana Mikhayluk, 2018. "Directions To Improve The Effectiveness Of Russia s Energy Export Policy," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 227-239.

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    More about this item

    Keywords

    Energy Intensity; Elasticity of Energy Intensity; Credit Market;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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