IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v36y2014icp362-369.html
   My bibliography  Save this article

The asymmetric Granger-causality analysis between energy consumption and income in the United States

Author

Listed:
  • Tiwari, Aviral Kumar

Abstract

We investigated Granger-causality between variants of the energy consumption sources and Gross Domestic Product (GDP) for the United State of America (USA). To accomplish this objective we utilized a recent approach of asymmetric Granger-causality developed by Hatemi-J for the period January 1973–October 2011. Our results indicated presence of asymmetric Granger-causality between a few variants of energy consumption sources (i.e., Coal Consumption (CC), Natural Gas Consumption (NG), Primary Energy Consumption (PE), and Total Renewable Energy Consumption (TRE)) and GDP (all measured in growth rates). Additionally, when positive shocks are analyzed we found the evidence of unidirectional Granger-causality running from GDP growth rate to growth rate of CC and from growth rate of Total Electricity End Use (EC) to GDP growth rate. Additionally, we find significant evidence of bidirectional Granger-causality between NG and GDP, PE and GDP and TRE and GDP (all measured in growth rates). However, in case of negative shocks we find that the null hypothesis that growth rates in CC and TRE do not Granger-cause GDP growth rate is rejected at 5% level of significance. These results have important implications for research analysts as well as policy makers of the USA economy.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:rensus:v:36:y:2014:i:c:p:362-369
    DOI: 10.1016/j.rser.2014.04.066
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032114003049
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2014.04.066?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yildirim, Ertuğrul & Saraç, Şenay & Aslan, Alper, 2012. "Energy consumption and economic growth in the USA: Evidence from renewable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6770-6774.
    2. A. Hatemi-J, 2003. "A new method to choose optimal lag order in stable and unstable VAR models," Applied Economics Letters, Taylor & Francis Journals, vol. 10(3), pages 135-137.
    3. Helmut Lütkepohl, 2005. "New Introduction to Multiple Time Series Analysis," Springer Books, Springer, number 978-3-540-27752-1, November.
    4. Payne, James E., 2009. "On the dynamics of energy consumption and output in the US," Applied Energy, Elsevier, vol. 86(4), pages 575-577, April.
    5. Hatemi-J, Abdulnasser & Uddin, Gazi Salah, 2012. "Is the causal nexus of energy utilization and economic growth asymmetric in the US?," Economic Systems, Elsevier, vol. 36(3), pages 461-469.
    6. Shahbaz, Muhammad & Tang, Chor Foon & Shahbaz Shabbir, Muhammad, 2011. "Electricity consumption and economic growth nexus in Portugal using cointegration and causality approaches," Energy Policy, Elsevier, vol. 39(6), pages 3529-3536, June.
    7. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    8. Krewitt, Wolfram & Simon, Sonja & Graus, Wina & Teske, Sven & Zervos, Arthouros & Schafer, Oliver, 2007. "The 2 [degree sign]C scenario--A sustainable world energy perspective," Energy Policy, Elsevier, vol. 35(10), pages 4969-4980, October.
    9. Aviral Kumar TIWARI, 2011. "Energy Consumption, Co2 Emission and Economic Growth: A Revisit of the Evidence from India," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
    10. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    11. Abdulnasser Hatemi-J, 2012. "Asymmetric causality tests with an application," Empirical Economics, Springer, vol. 43(1), pages 447-456, August.
    12. 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.
    13. Kum, Hakan & Ocal, Oguz & Aslan, Alper, 2012. "The relationship among natural gas energy consumption, capital and economic growth: Bootstrap-corrected causality tests from G-7 countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 2361-2365.
    14. Ozturk, Ilhan, 2010. "A literature survey on energy-growth nexus," Energy Policy, Elsevier, vol. 38(1), pages 340-349, January.
    15. Susana Silva & Isabel Soares & Carlos Pinho, 2012. "The Impact of Renewable Energy Sources on Economic Growth and CO2 Emissions - a SVAR approach," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 133-144.
    16. Ewing, Bradley T. & Payne, James E. & Caporin, Massimilano, 2022. "The Asymmetric Impact of Oil Prices and Production on Drilling Rig Trajectory: A correction," Resources Policy, Elsevier, vol. 79(C).
    17. R. Scott Hacker & Abdulnasser Hatemi-J, 2005. "A test for multivariate ARCH effects," Applied Economics Letters, Taylor & Francis Journals, vol. 12(7), pages 411-417.
    18. Aslan, Alper, 2011. "Does natural gas consumption follow a nonlinear path over time? Evidence from 50 US States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4466-4469.
    19. Jurgen A. Doornik & Henrik Hansen, 2008. "An Omnibus Test for Univariate and Multivariate Normality," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(s1), pages 927-939, December.
    20. Aviral Kumar Tiwari, 2011. "A structural VAR analysis of renewable energy consumption, real GDP and CO2 emissions: Evidence from India," Economics Bulletin, AccessEcon, vol. 31(2), pages 1793-1806.
    21. 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.
    22. Payne, James E., 2010. "A survey of the electricity consumption-growth literature," Applied Energy, Elsevier, vol. 87(3), pages 723-731, March.
    23. Pao, Hsiao-Tien & Tsai, Chung-Ming, 2010. "CO2 emissions, energy consumption and economic growth in BRIC countries," Energy Policy, Elsevier, vol. 38(12), pages 7850-7860, December.
    24. James E. Payne, 2010. "Survey of the international evidence on the causal relationship between energy consumption and growth," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(1), pages 53-95, January.
    25. Pao, Hsiao-Tien & Fu, Hsin-Chia, 2013. "The causal relationship between energy resources and economic growth in Brazil," Energy Policy, Elsevier, vol. 61(C), pages 793-801.
    26. Tiwari Aviral, 2011. "Primary Energy Consumption, CO2 Emissions and Economic Growth: Evidence from India," South East European Journal of Economics and Business, Sciendo, vol. 6(2), pages 99-117, November.
    27. Ocal, Oguz & Aslan, Alper, 2013. "Renewable energy consumption–economic growth nexus in Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 494-499.
    28. Tugcu, Can Tansel & Ozturk, Ilhan & Aslan, Alper, 2012. "Renewable and non-renewable energy consumption and economic growth relationship revisited: Evidence from G7 countries," Energy Economics, Elsevier, vol. 34(6), pages 1942-1950.
    29. repec:ers:journl:v:xv:y:2012:i:sie:p:133-144 is not listed on IDEAS
    30. Bowden, Nicholas & Payne, James E., 2009. "The causal relationship between U.S. energy consumption and real output: A disaggregated analysis," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 180-188.
    31. Soytas, Ugur & Sari, Ramazan & Ewing, Bradley T., 2007. "Energy consumption, income, and carbon emissions in the United States," Ecological Economics, Elsevier, vol. 62(3-4), pages 482-489, May.
    32. Toshihiko Masui, Tatsuya Hanaoka, Saeko Hikita, and Mikiko Kainuma, 2006. "Assessment of CO2 Reductions and Economic Impacts Considering Energy-Saving Investments," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 175-190.
    33. Chien, Taichen & Hu, Jin-Li, 2007. "Renewable energy and macroeconomic efficiency of OECD and non-OECD economies," Energy Policy, Elsevier, vol. 35(7), pages 3606-3615, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Hammoudeh, Shawkat & Shahzad, Syed Jawad Hussain, 2017. "Bounds testing approach to analyzing the environment Kuznets curve hypothesis with structural beaks: The role of biomass energy consumption in the United States," Energy Economics, Elsevier, vol. 68(C), pages 548-565.
    2. Zhao, Xin & Mahendru, Mandeep & Ma, Xiaowei & Rao, Amar & Shang, Yuping, 2022. "Impacts of environmental regulations on green economic growth in China: New guidelines regarding renewable energy and energy efficiency," Renewable Energy, Elsevier, vol. 187(C), pages 728-742.
    3. Saldivia, Mauricio & Kristjanpoller, Werner & Olson, Josephine E., 2020. "Energy consumption and GDP revisited: A new panel data approach with wavelet decomposition," Applied Energy, Elsevier, vol. 272(C).
    4. Shahbaz, Muhammad & Hussain Shahzad, Syed Jawad & Jammazi, Rania, 2016. "Nexus between U.S Energy Sources and Economic Activity: Time-Frequency and Bootstrap Rolling Window Causality Analysis," MPRA Paper 68724, University Library of Munich, Germany, revised 08 Jan 2016.
    5. Sarwar, Suleman, 2022. "Impact of energy intensity, green economy and blue economy to achieve sustainable economic growth in GCC countries: Does Saudi Vision 2030 matters to GCC countries," Renewable Energy, Elsevier, vol. 191(C), pages 30-46.
    6. Abdulnasser Hatemi-J & Tsangyao Chang & Wen-Yi Chen & Feng-Li Lin & Rangan Gupta, 2015. "Asymmetric Granger Causality between Military Expenditures and Economic Growth in Top Six Defense Suppliers," Working Papers 201565, University of Pretoria, Department of Economics.
    7. Shahbaz, Muhammad & Gozgor, Giray & Hammoudeh, Shawkat, 2019. "Human capital and export diversification as new determinants of energy demand in the United States," Energy Economics, Elsevier, vol. 78(C), pages 335-349.
    8. Kouton, Jeffrey, 2019. "The asymmetric linkage between energy use and economic growth in selected African countries: Evidence from a nonlinear panel autoregressive distributed lag model," Energy Economics, Elsevier, vol. 83(C), pages 475-490.
    9. Adekoya, Oluwasegun B. & Ogunnusi, Timilehin P. & Oliyide, Johnson A., 2021. "Sector-by-sector non-renewable energy consumption shocks and manufacturing performance in the U.S.: Analysis of the asymmetric issue with nonlinear ARDL and the role of structural breaks," Energy, Elsevier, vol. 222(C).
    10. Chang, Tsangyao & Chen, Wen-Yi, 2017. "Revisiting the relationship between suicide and unemployment: Evidence from linear and nonlinear cointegration," Economic Systems, Elsevier, vol. 41(2), pages 266-278.
    11. Ben-Salha, Ousama & Hkiri, Besma & Aloui, Chaker, 2018. "Sectoral energy consumption by source and output in the U.S.: New evidence from wavelet-based approach," Energy Economics, Elsevier, vol. 72(C), pages 75-96.
    12. Mahalingam, Brinda & Orman, Wafa Hakim, 2018. "GDP and energy consumption: A panel analysis of the US," Applied Energy, Elsevier, vol. 213(C), pages 208-218.
    13. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit & Kuşkaya, Sevda, 2017. "Can biomass energy be an efficient policy tool for sustainable development?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 830-845.
    14. Carmona, Mónica & Congregado, Emilio & Feria, Julia & Iglesias, Jesús, 2017. "The energy-growth nexus reconsidered: Persistence and causality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 342-347.
    15. Ayşen SİVRİKAYA & Mübariz HASANOV, 2019. "Time-Varying and Asymmetric Relationship between Energy Use and Macroeconomic Activity," Sosyoekonomi Journal, Sosyoekonomi Society.
    16. Menegaki, Angeliki N. & Tugcu, Can Tansel, 2017. "Energy consumption and Sustainable Economic Welfare in G7 countries; A comparison with the conventional nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 892-901.
    17. Troster, Victor & Shahbaz, Muhammad & Uddin, Gazi Salah, 2018. "Renewable energy, oil prices, and economic activity: A Granger-causality in quantiles analysis," Energy Economics, Elsevier, vol. 70(C), pages 440-452.
    18. Abdulnasser Hatemi-J & Tsangyao Chang & Wen-Yi Chen & Feng-Li Lin & Rangan Gupta, 2018. "Asymmetric causality between military expenditures and economic growth in top six defense spenders," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(3), pages 1193-1207, May.
    19. Carmona, Mónica & Feria, Julia & Golpe, Antonio A. & Iglesias, Jesus, 2017. "Energy consumption in the US reconsidered. Evidence across sources and economic sectors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1055-1068.
    20. Hoang, Thi Hong Van & Shahzad, Syed Jawad Hussain & Czudaj, Robert L., 2020. "Renewable energy consumption and industrial production: A disaggregated time-frequency analysis for the U.S," Energy Economics, Elsevier, vol. 85(C).
    21. Raggad, Bechir, 2021. "Time varying causal relationship between renewable energy consumption, oil prices and economic activity: New evidence from the United States," Resources Policy, Elsevier, vol. 74(C).
    22. Tugcu, Can Tansel & Tiwari, Aviral Kumar, 2016. "Does renewable and/or non-renewable energy consumption matter for total factor productivity (TFP) growth? Evidence from the BRICS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 610-616.
    23. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Hammoudeh, Shawkat & Shahzad, Syed Jawad Hussain, 2017. "Bounds Testing Approach to Analyzing the Environment Kuznets Curve Hypothesis: The Role of Biomass Energy Consumption in the United States with Structural Breaks," MPRA Paper 81840, University Library of Munich, Germany, revised 07 Oct 2017.
    24. Zhoumu Yang & Jingjing Cai & Yun Lu & Bin Zhang, 2022. "The Impact of Economic Growth, Industrial Transition, and Energy Intensity on Carbon Dioxide Emissions in China," Sustainability, MDPI, vol. 14(9), pages 1-14, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. Marques, António Cardoso & Fuinhas, José Alberto & Neves, Sónia Almeida, 2018. "Ordinary and Special Regimes of electricity generation in Spain: How they interact with economic activity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1226-1240.
    4. Kandemir Kocaaslan, Ozge, 2013. "The causal link between energy and output growth: Evidence from Markov switching Granger causality," Energy Policy, Elsevier, vol. 63(C), pages 1196-1206.
    5. Destek, Mehmet Akif, 2016. "Renewable energy consumption and economic growth in newly industrialized countries: Evidence from asymmetric causality test," Renewable Energy, Elsevier, vol. 95(C), pages 478-484.
    6. 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.
    7. Kahia, Montassar & Aïssa, Mohamed Safouane Ben & Lanouar, Charfeddine, 2017. "Renewable and non-renewable energy use - economic growth nexus: The case of MENA Net Oil Importing Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 127-140.
    8. Ozcan, Burcu & Ozturk, Ilhan, 2019. "Renewable energy consumption-economic growth nexus in emerging countries: A bootstrap panel causality test," Renewable and Sustainable Energy Reviews, Elsevier, vol. 104(C), pages 30-37.
    9. Haiyun Xu, 2016. "Economic policy uncertainty and housing returns in Germany: Evidence from a bootstrap rolling window," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(2), pages 309-332.
    10. Shahbaz, Muhammad & Zeshan, Muhammad & Afza, Talat, 2012. "Is energy consumption effective to spur economic growth in Pakistan? New evidence from bounds test to level relationships and Granger causality tests," Economic Modelling, Elsevier, vol. 29(6), pages 2310-2319.
    11. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Hammoudeh, Shawkat & Shahzad, Syed Jawad Hussain, 2017. "Bounds testing approach to analyzing the environment Kuznets curve hypothesis with structural beaks: The role of biomass energy consumption in the United States," Energy Economics, Elsevier, vol. 68(C), pages 548-565.
    12. Shahbaz, Muhammad & Solarin, Sakiru Adebola & Hammoudeh, Shawkat & Shahzad, Syed Jawad Hussain, 2017. "Bounds Testing Approach to Analyzing the Environment Kuznets Curve Hypothesis: The Role of Biomass Energy Consumption in the United States with Structural Breaks," MPRA Paper 81840, University Library of Munich, Germany, revised 07 Oct 2017.
    13. Dakpogan, Arnaud & Smit, Eon, 2018. "Effect of negative shocks to electricity consumption on negative shocks to economic growth in Benin," MPRA Paper 89539, University Library of Munich, Germany.
    14. Omri, Anis, 2014. "An international literature survey on energy-economic growth nexus: Evidence from country-specific studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 951-959.
    15. Salim, Ruhul A. & Hassan, Kamrul & Shafiei, Sahar, 2014. "Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries," Energy Economics, Elsevier, vol. 44(C), pages 350-360.
    16. Shahbaz, Muhammad & Hye, Qazi Muhammad Adnan & Tiwari, Aviral Kumar & Leitão, Nuno Carlos, 2013. "Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 109-121.
    17. Seong-Hoon Lee & Yonghun Jung, 2018. "Causal dynamics between renewable energy consumption and economic growth in South Korea: Empirical analysis and policy implications," Energy & Environment, , vol. 29(7), pages 1298-1315, November.
    18. Kahia, Montassar & Ben Aissa, Mohamed Safouane, 2014. "Renewable and non-renewable energy consumption and economic growth: Evidence from MENA Net Oil Exporting Countries," MPRA Paper 80776, University Library of Munich, Germany.
    19. Shahbaz, Muhammad & Hussain Shahzad, Syed Jawad & Jammazi, Rania, 2016. "Nexus between U.S Energy Sources and Economic Activity: Time-Frequency and Bootstrap Rolling Window Causality Analysis," MPRA Paper 68724, University Library of Munich, Germany, revised 08 Jan 2016.
    20. Sebri, Maamar & Ben-Salha, Ousama, 2014. "On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions and trade openness: Fresh evidence from BRICS countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 14-23.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:36:y:2014:i:c:p:362-369. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.