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The Relationship between Electricity Consumption and Economic Growth in the Selected Member Countries of the International Energy Agency (IEA): An ARDL Bounds Test Approach

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  • Ugur Korkut Pata

    (Department of Economics, Faculty of Economics and Adminstrative Sciences, Karadeniz Technical University, Trabzon, Turkey.)

  • Suleyman Yurtkuran

    (Department of Economics, Faculty of Economics and Adminstrative Sciences, Karadeniz Technical University, Trabzon, Turkey)

Abstract

In this study, the causality links between electricity consumption and economic growth are investigated for Turkey, the United Kingdom, Spain, Belgium and United States covering the period from 1964 to 2014. The results of autoregressive distributed lag (ARDL) approach, bounds testing and error correction model show that there is a positive one-way and statistically significant causality moving from electricity consumption to economic growth in the short- and long-run. The empirical results show that electricity consumption and economic growth are not neutral with respect to each other, and therefore energy conservation policies should not be applied. The growth hypothesis is valid for five IEA countries. Electricity consumption encouraging policies support to these countries economic growth.

Suggested Citation

  • Ugur Korkut Pata & Suleyman Yurtkuran, 2017. "The Relationship between Electricity Consumption and Economic Growth in the Selected Member Countries of the International Energy Agency (IEA): An ARDL Bounds Test Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(2), pages 341-364, Spring.
    • Handle: RePEc:eut:journl:v:21:y:2017:i:2:p:341
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    References listed on IDEAS

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