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Structural Breaks, Electricity Consumption and Economic Growth: Evidence from Turkey

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  • Acaravici, Ali

    ()
    (Faculty of Economics and Administrative Sciences, Mustafa Kemal University, Antakya-Hatay, Turkey. Tel: +903262455845, Fax:+903262455854)

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Abstract

This paper investigates the short-run and long-run causality issues between electricity consumption and economic growth in Turkey by using the co-integration and vector error-correction models with structural breaks. It employs annual data covering the period 1968–2005. The study also explores the causal relationship between these variables in terms of the three error-correction based Granger causality models. The empirical results are as follows: i) Both variables are nonstationary in levels and stationary in the first differences with/without structural breaks, ii) there exists a longrun relationship between variables, iii) there is unidirectional causality running from the electricity consumption to economic growth. The overall results indicate that “growth hypothesis” for electricity consumption and growth nexus holds in Turkey. Thus, energy conservation policies, such as rationing electricity consumption, may harm economic growth in Turkey.

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Bibliographic Info

Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

Volume (Year): (2010)
Issue (Month): 2 (July)
Pages: 140-154

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Handle: RePEc:rjr:romjef:v::y:2010:i:2:p:140-154

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Keywords: Electricity consumption; economic growth; structural breaks; cointegration; causality;

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References

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Citations

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Cited by:
  1. Maria Pempetzoglou, 2014. "Electricity Consumption and Economic Growth: A Linear and Nonlinear Causality Investigation for Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 263-273.
  2. Sbia, Rashid & Shahbaz, Muhammad, 2013. "The Weight of Economic Growth and Urbanization on Electricity Demand in UAE," MPRA Paper 47981, University Library of Munich, Germany, revised 03 Jul 2013.
  3. Mustafa SAATCÝ & Yasemin DUMRUL, 2013. "The Relationship Between Energy Consumption and Economic Growth: Evidence From A Structural Break Analysis For Turkey," International Journal of Energy Economics and Policy, Econjournals, vol. 3(1), pages 20-29.
  4. Muhammad, Shahbaz, 2011. "Electricity Consumption, Financial Development and Economic Growth Nexus: A Revisit Study of Their Causality in Pakistan," MPRA Paper 35588, University Library of Munich, Germany, revised 27 Dec 2011.
  5. Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2014. "The nexus between electricity consumption and economic growth in Bahrain," Economic Modelling, Elsevier, vol. 38(C), pages 227-237.
  6. Tang, Chor Foon & Shahbaz, Muhammad & Arouri, Mohamed, 2013. "Re-investigating the electricity consumption and economic growth nexus in Portugal," Energy Policy, Elsevier, vol. 62(C), pages 1515-1524.
  7. Muhammad, Shahbaz & Ilhan, Ozturk, 2012. "Electricity consumption and economic growth causality revisited: evidence from Turkey," MPRA Paper 37637, University Library of Munich, Germany, revised 20 Mar 2012.

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