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On The Relationship between Energy Consumption and Real GDP in Iran: An Application of VEC Model

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  • Amir Mansor Tehranchian

    (Assistant professor, faculty of economics, university of Mazandaran, Iran)

Abstract

This paper examines the causal relationship between energy use and real GDP for the period 1967-2002 in Iran. The results of Phillips- Perron test indicate that the real GDP and the four categories of energy , i.e. coal, oil, gas, and hydroelectric energy are integrated of order one. Besides, the Johansen – Juselius maximum likelihood co- integration tests imply the existence of Granger causality. The VEC models that have been estimated to test the direction of Granger causality support a unidirectional causality from GDP to energy use in short run.

Suggested Citation

  • Amir Mansor Tehranchian, 2006. "On The Relationship between Energy Consumption and Real GDP in Iran: An Application of VEC Model," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 11(2), pages 141-147, spring.
    • Handle: RePEc:eut:journl:v:11:y:2006:i:2:p:141
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    References listed on IDEAS

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    5. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
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    Cited by:

    1. Mehdi Abid & Rafaa Mraihi, 2015. "Disaggregate Energy Consumption Versus Economic Growth in Tunisia: Cointegration and Structural Break Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 1104-1122, December.
    2. Shahateet, Mohammed Issa & Al-Majali, Khalid Ali & Al-Hahabashneh, Fedel, 2014. "Causality and Cointegration between Economic Growth and Energy Consumption: Econometric Evidence from Jordan," MPRA Paper 59067, University Library of Munich, Germany, revised Oct 2014.

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