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Dynamic co-movements between energy consumption and economic growth. A panel data and wavelet perspective

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  • Kristjanpoller R., Werner
  • Sierra C., Alejandro
  • Scavia D., Javier

Abstract

In this study, a wavelet analysis with panel data is performed to conclude about the causality relationship between the GDP and energy consumption of 74 countries of the world, for the years 1972 to 2014. We add a frequency-domain perspective to conclude about the effects at different time periods, while the panel data analysis allows us to study different heterogeneities that may occur due to geography, GDP per capita, and human development classification. For all of the sample, there is bi-causality between electrical energy consumption and GDP in the long run, while for the short and medium run, causality is verified from GDP to electricity consumption. When segmented by continents, the results are mixed; however, when the division is done by HDI, there is bi-causality between electricity consumption and GDP for high HDI countries. In contrast, for countries with a low HDI, there is causality from electricity consumption to GDP. This poses a set of particularly important policy implications for countries with low human development.

Suggested Citation

  • Kristjanpoller R., Werner & Sierra C., Alejandro & Scavia D., Javier, 2018. "Dynamic co-movements between energy consumption and economic growth. A panel data and wavelet perspective," Energy Economics, Elsevier, vol. 72(C), pages 640-649.
    • Handle: RePEc:eee:eneeco:v:72:y:2018:i:c:p:640-649
    DOI: 10.1016/j.eneco.2018.05.010
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    More about this item

    Keywords

    GDP; Electricity consumption; Wavelet transform; Panel data; Granger causality;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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