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Renewable Energy in the Eurozone: Exploring Macroeconomic Impacts via FMOLS

Author

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  • Lenka Vyrostková

    (Faculty of Mechanical Engineering, Technical University of Košice, Letná 9, 042 00 Košice, Slovakia)

  • Ervin Lumnitzer

    (Faculty of Mechanical Engineering, Technical University of Košice, Letná 9, 042 00 Košice, Slovakia)

  • Anna Yehorova

    (Faculty of Mechanical Engineering, Technical University of Košice, Letná 9, 042 00 Košice, Slovakia)

Abstract

This article examines the relationship between macroeconomic variables and the share of renewable energy in Eurozone countries from 2006 to 2020. Using the Fully Modified Ordinary Least Squares (FMOLS) method, we analyze the impact of Gross Domestic Product (GDP) per capita, unemployment rate, Financial Development Index (FDI), inflation, government efficiency, and corruption control on the proportion of renewable energy. Focused on the Eurozone, our study fills a gap in existing research. We compile diverse findings from the literature review on this topic. Our analysis reveals that higher GDP per capita positively influences the proportion of renewable energy, while unemployment, lower financial development, higher inflation, inefficient governance, and corruption negatively impact renewable energy adoption. These findings underscore the importance of addressing economic development alongside sustainable energy initiatives. Policymakers should prioritize improving GDP per capita, and addressing barriers such as unemployment and corruption to facilitate the transition to a more sustainable energy landscape in the Eurozone.

Suggested Citation

  • Lenka Vyrostková & Ervin Lumnitzer & Anna Yehorova, 2024. "Renewable Energy in the Eurozone: Exploring Macroeconomic Impacts via FMOLS," Energies, MDPI, vol. 17(5), pages 1-18, February.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:5:p:1159-:d:1348565
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    References listed on IDEAS

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    1. Tamazian, Artur & Bhaskara Rao, B., 2010. "Do economic, financial and institutional developments matter for environmental degradation? Evidence from transitional economies," Energy Economics, Elsevier, vol. 32(1), pages 137-145, January.
    2. Rivers, Nicholas, 2013. "Renewable energy and unemployment: A general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 35(4), pages 467-485.
    3. Veli Yılancı & Emel İslamoğlu & Sinem Yıldırımalp & Gökçe Candan, 2020. "The Relationship between Unemployment Rates and Renewable Energy Consumption: Evidence from Fourier ADL Cointegration Test," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 8(1), pages 17-28, June.
    4. Yang, Suyeon & Park, Sangchan, 2020. "The effects of renewable energy financial incentive policy and democratic governance on renewable energy aid effectiveness," Energy Policy, Elsevier, vol. 145(C).
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