Does energy consumption affect growth?
AbstractA review of the literature reveals discrepancies between estimates of the impact of energy consumption on output and growth. This paper highlights the importance of underlying theoretical concerns, extends a neoclassical growth model to include energy consumption, applies panel data cointegration methods that deal with cross-sectional dependence and structural breaks to a sample of thirteen high energy consuming countries, and provides empirical estimates of the impact of energy consumption on output and growth. Results suggest that energy consumption has a permanent positive effect on output levels but has no statistically significant effect on growth. We suggest that rebound effects may confound the observable effects of energy on growth and that the effects on the environment of attempts to stimulate economic growth may never be forecast correctly ex ante.
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Bibliographic InfoPaper provided by Auckland University of Technology, Department of Economics in its series Working Papers with number 2012-04.
Length: 23 pages
Date of creation: Apr 2012
Date of revision:
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More information through EDIRC
Energy consumption per capita; Level effect; Growth effect.;
Find related papers by JEL classification:
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-ENE-2012-08-23 (Energy Economics)
- NEP-FDG-2012-08-23 (Financial Development & Growth)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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The Warwick Economics Research Paper Series (TWERPS)
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