Causality between economic growth and energy consumption in Croatia
AbstractThe main goal of the paper is to investigate relation between economic development and energy consumption in Croatia. This paper examines the casual relationship, using Granger test, between gross domestic products (GDP) and total primary energy consumption in Croatia. Analyzed period is from 1953 to 2005. In the paper vector auto-regression model (VAR), Granger causality test and unit root test are used as tools for analysis. Economic and energetic time series usually have the problem of non stationarity series. Non-stationary time series are trying stationarity with differentiation of variables, using co-integration technique. Applying Granger’s causality test in Croatian case, we found that GDP Granger causes total energy consumption not energy consumption Granger causes GDP. The result shows that relationship for Croatia runs from total primary energy consumptions to gross domestic products, not from gross domestic products to primary energy consumption. Conclusion of VAR model is that variable total primary energy consumptions and the constant are not significant in the model and that variable gross domestic products is significant. Base conclusion of the paper is that VAR model evaluation shows that change of GDP of 1% in period t-1 would affect the annual total primary energy consumption for 0,509% in period t.
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Bibliographic InfoArticle provided by University of Rijeka, Faculty of Economics in its journal Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics.
Volume (Year): 27 (2009)
Issue (Month): 2 ()
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Web page: https://www.efri.uniri.hr/en/proceedings
More information through EDIRC
GDP; growth; energy; consumption; Granger causality;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
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