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Time-Varying and Asymmetric Relationship between Energy Use and Macroeconomic Activity

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  • Ayşen SİVRİKAYA
  • Mübariz HASANOV

Abstract

In this paper, we analyze the dynamic interactions among energy use, output, capital stock and employment for the USA. Our results suggest that these interactions are time-varying and show asymmetries in terms of the one variable’s responses of big versus small and positive versus negative shocks to another variable. In particular, we find that negative energy shocks have greater impact on macroeconomic variables than positive shocks. Furthermore, small energy shocks have greater effects than big shocks. Our results also suggest that the shocks to production factors reduce energy use, implying that energy and the other factors of production are substitutes rather than compliments. These results have clear policy implications. Namely, aggressive energy saving policies might be more politically viable. In addition, the policies promoting more efficient and energy-saving capital and production technologies could help reducing energy use.Classification-JEL: Q43, C32, C51.Keywords: Asymmetry, Employment, Energy Demand, Structural Change, Output Growth.Issue: 27(41)

Suggested Citation

  • Ayşen SİVRİKAYA & Mübariz HASANOV, 2019. "Time-Varying and Asymmetric Relationship between Energy Use and Macroeconomic Activity," Sosyoekonomi Journal, Sosyoekonomi Society.
    • Handle: RePEc:sos:sosjrn:190312
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    More about this item

    Keywords

    asymmetry; employment; energy demand; structural change; output growth.issue: 27(41);
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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