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The causal relationship between energy use and economic growth in Switzerland

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  • Baranzini, Andrea
  • Weber, Sylvain
  • Bareit, Markus
  • Mathys, Nicole A.

Abstract

This paper investigates the relationships between energy consumption and economic growth in Switzerland over the period 1950–2010. We apply bounds testing techniques to different energy types separately. Robustness tests are performed by including additional variables and restricting the analysis to the period after 1970. The results show that there exist robust long-run relationships going from real GDP toward heating oil and electricity consumption. The relationship between heating oil and GDP is in fact bidirectional, although weaker from heating oil toward GDP than in the reverse direction. When investigating the period 1970–2010 only, the estimate of the long-run income elasticity of electricity consumption loses statistical significance and that for heating oil becomes negative. Those results imply a possible decoupling between GDP growth and energy consumption, so that energy conservation policies are not necessarily expected to have a negative impact on Swiss economic growth.

Suggested Citation

  • Baranzini, Andrea & Weber, Sylvain & Bareit, Markus & Mathys, Nicole A., 2013. "The causal relationship between energy use and economic growth in Switzerland," Energy Economics, Elsevier, vol. 36(C), pages 464-470.
  • Handle: RePEc:eee:eneeco:v:36:y:2013:i:c:p:464-470
    DOI: 10.1016/j.eneco.2012.09.015
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    3. Omri, Anis & Daly, Saida & Rault, Christophe & Chaibi, Anissa, 2015. "Financial development, environmental quality, trade and economic growth: What causes what in MENA countries," Energy Economics, Elsevier, vol. 48(C), pages 242-252.
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    6. Nasre Esfahani, Mohammad & Rasoulinezhad, Ehsan, 2016. "Revisiting the relationships between non-renewable energy consumption, CO2 emissions and economic growth in Iran," MPRA Paper 71124, University Library of Munich, Germany.
    7. Ozturk, Ilhan & Al-Mulali, Usama, 2015. "Natural gas consumption and economic growth nexus: Panel data analysis for GCC countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 998-1003.
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    10. Kyophilavong, Phouphet & Shahbaz, Muhammad & Anwar, Sabeen & Masood, Sameen, 2015. "The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 46(C), pages 265-274.
    11. Mehdi Abid & Rafaa Mraihi, 2015. "Disaggregate Energy Consumption Versus Economic Growth in Tunisia: Cointegration and Structural Break Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 1104-1122, December.
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    13. Lean, Hooi Hooi & Smyth, Russell, 2014. "Disaggregated energy demand by fuel type and economic growth in Malaysia," Applied Energy, Elsevier, vol. 132(C), pages 168-177.
    14. Al-mulali, Usama & Lee, Janice YM & Hakim Mohammed, Abdul & Sheau-Ting, Low, 2013. "Examining the link between energy consumption, carbon dioxide emission, and economic growth in Latin America and the Caribbean," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 42-48.
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    17. Huiru Zhao & Haoran Zhao & Xiaoyu Han & Zhonghua He & Sen Guo, 2016. "Economic Growth, Electricity Consumption, Labor Force and Capital Input: A More Comprehensive Analysis on North China Using Panel Data," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-21, October.
    18. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
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    20. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
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    More about this item

    Keywords

    Energy–GDP relationship; Energy policy; Cointegration; Switzerland;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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