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Economic Development and End-Use Energy Demand

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  • Kenneth B. Medlock III
  • Ronald Soligo

Abstract

We examine the relationship between economic development and energy demand. The paper identifies the development patterns that characterize particular economic sectors, and analyzes the effect of sector-specific energy demand growth rates on the composition of final energy demand. We also examine some of the associated policy implications. Industrial energy demand increases most rapidly at the initial stages of development, but growth slows steadily throughout the industrialization process. Energy demand for transportation rises steadily, and takes the majority share of total energy use at the latter stages of development. Energy demand originating from the residential and commercial sector also increases to surpass industrial demand, but long term growth is not as pronounced as it is in the transport sector. These results have implications for the primary energy demand of an economy as it develops, and thus, for domestic energy security and global geopolitical relationships.

Suggested Citation

  • Kenneth B. Medlock III & Ronald Soligo, 2001. "Economic Development and End-Use Energy Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 77-105.
    • Handle: RePEc:aen:journl:2001v22-02-a04
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    1. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    2. Stern, David I., 2000. "A multivariate cointegration analysis of the role of energy in the US macroeconomy," Energy Economics, Elsevier, vol. 22(2), pages 267-283, April.
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