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Asymmetries in the dynamic interrelationship between energy consumption and economic growth: Evidence from Turkey

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  • Araç, Ayşen
  • Hasanov, Mübariz

Abstract

In this study we examine possible nonlinearities in dynamic interrelationship between energy consumption and economic growth in Turkey for the 1960–2010 period by using a smooth transition vector autoregressive model. In order to trace the effects of one variable on another, we calculate Generalized Impulse Response Functions (GIRFs). The computed impulse response functions demonstrate asymmetric effects of positive versus negative and small versus large energy consumption shocks on output growth and vice versa. Specifically, we find that negative energy shocks have a greater effect on output growth than positive energy shocks, and that big negative energy shocks affect output much more than small negative energy shocks. Similarly, we find that positive output shock has a greater effect on energy consumption whereas negative shocks have almost no effect on energy consumption. The results of this study have clear and important implications for energy economists and policymakers in Turkey.

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  • Araç, Ayşen & Hasanov, Mübariz, 2014. "Asymmetries in the dynamic interrelationship between energy consumption and economic growth: Evidence from Turkey," Energy Economics, Elsevier, vol. 44(C), pages 259-269.
  • Handle: RePEc:eee:eneeco:v:44:y:2014:i:c:p:259-269
    DOI: 10.1016/j.eneco.2014.04.013
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    More about this item

    Keywords

    Energy; Output growth; Nonlinearity;

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • 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
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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