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Energy consumption-GDP nexus: Heterogeneous panel causality analysis

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  • Akkemik, K. Ali
  • Göksal, Koray

Abstract

Existing studies examining the Granger causality relationship between energy consumption and GDP use a panel of countries but implicitly assume that the panels are homogeneous. This paper extends the Granger causality relationship between energy consumption and GDP by taking into account panel heterogeneity. For this purpose, we use a large panel of 79 countries for the period 1980–2007. Specifically, we examine four different causal relationships: homogeneous non-causality, homogeneous causality, heterogeneous non-causality, and heterogeneous causality. The results show that roughly seven-tenths of the countries exhibit bi-directional Granger causality, two-tenths exhibit no Granger causality, and one-tenths exhibit uni-directional Granger causality.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): 4 ()
Pages: 865-873

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Handle: RePEc:eee:eneeco:v:34:y:2012:i:4:p:865-873

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Web page: http://www.elsevier.com/locate/eneco

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Keywords: Energy; Granger causality; Heterogenous panel;

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  2. Shahbaz, Muhammad & Zeshan, Muhammad & Afza, Talat, 2012. "Is energy consumption effective to spur economic growth in Pakistan? New evidence from bounds test to level relationships and Granger causality tests," Economic Modelling, Elsevier, vol. 29(6), pages 2310-2319.
  3. Heidari, Hassan & Katircioglu, Salih Turan & Saeidpour, Lesyan, 2013. "Natural gas consumption and economic growth: Are we ready to natural gas price liberalization in Iran?," Energy Policy, Elsevier, vol. 63(C), pages 638-645.
  4. 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.

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