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Causality Relationship between Real GDP and Electricity Consumption in Romania (2001-2010)

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Author Info

  • Kayhan, Selim

    ()
    (Bozok University, Faculty of Economics and Administrative Sciences)

  • Adiguzel, Uğur

    ()
    (Bozok University, Faculty of Economics and Administrative Sciences)

  • Bayat, Tayfur

    ()
    (Adiyaman University, Besni Vocational School)

  • Lebe, Fuat

    ()
    (Bozok University, Faculty of Economics and Administrative Sciences)

Abstract

After Industrial Revolution, importance of energy in production has increased. As a result of two petroleum crisis, energy was included directly into the production function. While development level of countries has increased, energy consumption has also raised. Substantial increase in energy consumption with economic growth provide a motivation to investigate questions “Is there is a relationship between energy consumption and economic growth?” and if there is “What kind of relationship exists between them?”. The aim of this study is to analyse dynamic causal relationship between electricity consumption and economic growth in the Romanian economy for the period of 2001 – 2010 to answer this question. To this end, we utilize the Dolado – Lütkepohl, Tado - Yamamoto and traditional Granger causality tests. In this regard, we use Phillips – Perron and Dickey Fuller – GLS unit root tests and Bai – Perron multiple structural breaks test. Results support that causality runs from electricity consumption to economic growth in the case of Romania economy.

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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): 4 (December)
Pages: 169-183

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Handle: RePEc:rjr:romjef:v::y:2010:i:4:p:169-183

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Keywords: Electricity Consumption; Economic Growth; Causality Test; Romania;

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References

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Cited by:
  1. Mutascu, Mihai & Shahbaz, Muhammad & Tiwari, Aviral Kumar, 2011. "Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania," MPRA Paper 29233, University Library of Munich, Germany.
  2. Nicholas Apergisu & Dan Danuletiu, 2012. "Energy Consumption and Growth in Romania: Evidence from a Panel Error Correction Model," International Journal of Energy Economics and Policy, Econjournals, vol. 2(4), pages 348-356.

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