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Renewable Energy Consumption-Economic Growth Nexus in Italy

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  • Cosimo Magazzino

    (Department of Political Sciences, Roma Tre University, Italian Economic Association (SIE), Royal Economic Society (RES), Via G. Chiabrera 199, 00145, Rome (RM), Italy)

Abstract

This study examines the renewable energy consumption-economic growth nexus in Italy over the period 1970-2007. Results of unit root tests show that all variables are non-stationary in their level form, but stationary in first differences. Cointegration analysis reveals that a single long-run relationship emerges. According to the long-run estimations, if renewable energy consumption increases by 1%, real GDP decreases by 0.23%. The Toda and Yamamoto approach shows that exists a unidirectional causal flow, running from renewable energy consumption to aggregate income, in line with the growth hypothesis . Moreover, these results are confirmed by Granger causality tests. FEVDs evidence that the forecast errors in real GDP are mainly due to uncertainty in GDP itself and renewable energy consumption, while the errors in predicting the renewable energy consumption are sensitive to disturbances only in energy equation.

Suggested Citation

  • Cosimo Magazzino, 2017. "Renewable Energy Consumption-Economic Growth Nexus in Italy," International Journal of Energy Economics and Policy, Econjournals, vol. 7(6), pages 119-127.
    • Handle: RePEc:eco:journ2:2017-06-15
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    References listed on IDEAS

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    More about this item

    Keywords

    Renewable energy consumption; economic growth; causality; Italy;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • 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
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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