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Coal consumption and industrial production nexus in USA: Cointegration with two unknown structural breaks and causality approaches

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  • Yildirim, Ertugrul
  • Aslan, Alper
  • Ozturk, Ilhan

Abstract

The paper investigates the causality relationships among industrial production index, coal consumption and employment in industrial sector for the period of 1973:1–2011:10 in USA. After noticing that there are breaks in the regression model, the Hatemi-J test for cointegration is employed to the cases that take into account two possible regime shifts. It is concluded that there is a long run relationship between industrial production and industrial coal consumption with the breaks at 1983:4 and 1998:4. We found a negative relationship between coal consumption and industrial production for the period of 1973:1–1983:4 and positive relationship for 1983:5–1998:4 period. For the last period that covers 1983:5–2011:10, the cointegration relationship turned to negative. In addition, the results show that causal relationship between coal consumption and industrial production changes over time.

Suggested Citation

  • Yildirim, Ertugrul & Aslan, Alper & Ozturk, Ilhan, 2012. "Coal consumption and industrial production nexus in USA: Cointegration with two unknown structural breaks and causality approaches," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 6123-6127.
  • Handle: RePEc:eee:rensus:v:16:y:2012:i:8:p:6123-6127
    DOI: 10.1016/j.rser.2012.07.002
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    References listed on IDEAS

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    Cited by:

    1. Camarero, Mariam & Forte, Anabel & Garcia-Donato, Gonzalo & Mendoza, Yurena & Ordoñez, Javier, 2015. "Variable selection in the analysis of energy consumption–growth nexus," Energy Economics, Elsevier, vol. 52(PA), pages 207-216.
    2. Adewuyi, Adeolu O. & Awodumi, Olabanji B., 2017. "Renewable and non-renewable energy-growth-emissions linkages: Review of emerging trends with policy implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 275-291.
    3. Chun Deng & Jie-Fang Dong, 2016. "Coal Consumption Reduction in Shandong Province: A Dynamic Vector Autoregression Model," Sustainability, MDPI, Open Access Journal, vol. 8(9), pages 1-16, August.
    4. Bhattacharya, Mita & Rafiq, Shuddhasattwa & Bhattacharya, Sankar, 2015. "The role of technology on the dynamics of coal consumption–economic growth: New evidence from China," Applied Energy, Elsevier, vol. 154(C), pages 686-695.
    5. Yildirim, Ertugrul & Aslan, Alper, 2012. "Energy consumption and economic growth nexus for 17 highly developed OECD countries: Further evidence based on bootstrap-corrected causality tests," Energy Policy, Elsevier, vol. 51(C), pages 985-993.
    6. Tiwari, Aviral Kumar, 2014. "The asymmetric Granger-causality analysis between energy consumption and income in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 36(C), pages 362-369.
    7. Bildirici, Melike E. & Bakirtas, Tahsin, 2014. "The relationship among oil, natural gas and coal consumption and economic growth in BRICTS (Brazil, Russian, India, China, Turkey and South Africa) countries," Energy, Elsevier, vol. 65(C), pages 134-144.
    8. Shahbaz, Muhammad & Islam, Faridul & Sabihuddin Butt, Muhammad, 2015. "Finance-Growth-Energy Nexus and the Role of Agriculture and Modern Sectors: Evidence from ARDL Bounds Test Approach to Cointegration in Pakistan," MPRA Paper 62848, University Library of Munich, Germany, revised 14 Mar 2015.
    9. repec:eee:appene:v:204:y:2017:i:c:p:667-678 is not listed on IDEAS

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