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Causal relationship between coal consumption and economic growth in Korea

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  • Yoo, Seung-Hoon
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    Abstract

    This paper investigates the short- and long-run causality issues between coal consumption and economic growth in Korea by applying modern time-series techniques. It employs annual data covering the period 1968-2002. Tests for unit roots, co-integration, and Granger-causality based on error-correction model are presented. The overall results show that there exists bi-directional causality running from coal consumption to economic growth with feedback. This means that an increase in coal consumption directly affects economic growth. Thus, in order not to adversely affect economic growth, Korea should endeavor to overcome the constraints on coal consumption. Moreover, the study lends support to the argument that an increase in real income gives rise to increased coal consumption.

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    Bibliographic Info

    Article provided by Elsevier in its journal Applied Energy.

    Volume (Year): 83 (2006)
    Issue (Month): 11 (November)
    Pages: 1181-1189

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    Handle: RePEc:eee:appene:v:83:y:2006:i:11:p:1181-1189

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    Keywords: Coal consumption Economic growth Granger-causality Unit root Co-integration Error-correction model;

    References

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    Cited by:
    1. Al-mulali, Usama & Fereidouni, Hassan Gholipour & Lee, Janice Ym & Sab, Che Normee Binti Che, 2013. "Examining the bi-directional long run relationship between renewable energy consumption and GDP growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 22(C), pages 209-222.
    2. Kumar, Saten & Shahbaz, Muhammad, 2010. "Coal Consumption and Economic Growth Revisited: Structural Breaks, Cointegration and Causality Tests for Pakistan," MPRA Paper 26151, University Library of Munich, Germany.
    3. Herrerias, M.J. & Joyeux, R. & Girardin, E., 2013. "Short- and long-run causality between energy consumption and economic growth: Evidence across regions in China," Applied Energy, Elsevier, vol. 112(C), pages 1483-1492.
    4. Apergis, Nicholas & Payne, James E., 2010. "The causal dynamics between coal consumption and growth: Evidence from emerging market economies," Applied Energy, Elsevier, vol. 87(6), pages 1972-1977, June.
    5. Apergis, Nicholas & Payne, James E., 2010. "Coal consumption and economic growth: Evidence from a panel of OECD countries," Energy Policy, Elsevier, vol. 38(3), pages 1353-1359, March.
    6. Muhammad SHAHBAZ & Smile DUBE, 2012. "Revisiting the Relationship between Coal Consumption and Economic Growth: Cointegration and Causality Analysis in Pakistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 12(1).
    7. Sahbi Farhani & Muhammad Shahbaz & Ilhan Ozturk, 2014. "Coal Consumption, Industrial Production and CO2 Emissions in China and India," Working Papers 2014-225, Department of Research, Ipag Business School.
    8. Oguz Ocal & Ilhan Ozturk & Alper Aslan, 2013. "Coal Consumption and Economic Growth in Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 3(2), pages 193-198.
    9. Amiri, Arshia & Zibaei, Mansour, 2012. "Granger causality between energy use and economic growth in France with using geostatistical models," MPRA Paper 36357, University Library of Munich, Germany.
    10. Narayan, Paresh Kumar & Wong, Philip, 2009. "A panel data analysis of the determinants of oil consumption: The case of Australia," Applied Energy, Elsevier, vol. 86(12), pages 2771-2775, December.
    11. Bahadori, Alireza & Vuthaluru, Hari B., 2010. "Estimation of potential savings from reducing unburned combustible losses in coal-fired systems," Applied Energy, Elsevier, vol. 87(12), pages 3792-3799, December.
    12. Svetlana Maslyuk & Dinusha Dharmaratna, 2012. "Impact of Shocks on Australian Coal Mining," Development Research Unit Working Paper Series 37-12, Monash University, Department of Economics.
    13. Saboori, Behnaz & Sulaiman, Jamalludin, 2013. "Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia," Energy Policy, Elsevier, vol. 60(C), pages 892-905.
    14. Yildirim, Ertugrul & Aslan, Alper & Ozturk, Ilhan, 2012. "Coal consumption and industrial production nexus in USA: Cointegration with two unknown structural breaks and causality approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 6123-6127.

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