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A dynamic econometric study of income, energy and exports in Turkey

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  • Halicioglu, Ferda

Abstract

This study attempts to examine empirically dynamic causal relationships between aggregate output, energy consumption, exports, capital and labour in the case of Turkey using the time series data for the period 1968-2008. This research tests the interrelationships between the variables using the bounds testing to cointegration procedure. The bounds test results indicate that there exists a long-run relationship between the variables in which the dependent variable is aggregate output. Within this study, three competing sets of hypotheses regarding the relationship between aggregate output, exports and energy consumption are tested. An augmented form of Granger causality analysis is conducted amongst the variables. In the long-run, causality runs interactively through the error correction term from labour, capital, exports and energy consumption to aggregate output. In the short-run, two important bilateral causalities were identified: between energy consumption and aggregate output, between exports and aggregate output. The short-run causality testing reveals further the existence of a unilateral causality running from exports to energy consumption too. The long-run relationship of aggregate output, energy consumption, exports, capital and labour equation is also checked for the parameter stability. The results also provide some important policy recommendations.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29579.

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Date of creation: 2010
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Handle: RePEc:pra:mprapa:29579

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Keywords: Aggregate output; energy consumption; capital; labour; cointegration; Granger causality; stability tests; Turkey;

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Cited by:
  1. Muhammad, Shahbaz & Saleheen, Khan & Mohammad, Iqbal Tahir, 2012. "The Dynamic Link between Energy Consumption, Economic Growth, Financial Development and Trade in China: Fresh Evidence from Multivariate Framework Analysis," MPRA Paper, University Library of Munich, Germany 42974, University Library of Munich, Germany, revised 26 Nov 2012.
  2. Saleheen, Khan & Farooq Ahmed, Jam & Muhammad, Shahbaz, 2012. "Electricity Consumption and Economic Growth in Kazakhstan: Fresh Evidence from a Multivariate Framework Analysis," MPRA Paper, University Library of Munich, Germany 43460, University Library of Munich, Germany, revised 20 Dec 2012.
  3. Raza, Syed Ali & Shahbaz, Muhammad, 2014. "Energy Conservation Policies may affect Trade Performance in Pakistan: Confirmation of Feedback Hypothesis," MPRA Paper, University Library of Munich, Germany 57775, University Library of Munich, Germany.

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