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Renewable and non-renewable energy consumption and economic growth in G7 countries: evidence from panel autoregressive distributed lag (P-ARDL) model

Author

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  • Jaganath Behera

    (University of Hyderabad)

  • Alok Kumar Mishra

    (University of Hyderabad)

Abstract

This paper aims to investigate the relationship between renewable and non-renewable energy consumption and economic growth in the G7 countries (Canada, France, Germany, United Kingdom, Italy and the United States) for the period of 1990–2015. The study used the Pesaran CADF panel second generation unit root test to verify the stationary properties of the variables. To examine the short-run and long-run dynamics the study employed panel autoregressive distributed lag (P-ARDL) model. The empirical findings suggest that there is a presence of cross-sectional dependency among the variables. The panel ARDL model confirms that energy price, labor force, and capital stock have positive and statistically significant long-run impact on economic growth in the G7 countries. The short run dynamics of the result recommend that there is a short run causality between non-renewable energy consumption and economic growth and capital stock to economic growth. The Hausman test found that PMG is more efficient than MG and DFE.

Suggested Citation

  • Jaganath Behera & Alok Kumar Mishra, 2020. "Renewable and non-renewable energy consumption and economic growth in G7 countries: evidence from panel autoregressive distributed lag (P-ARDL) model," International Economics and Economic Policy, Springer, vol. 17(1), pages 241-258, February.
    • Handle: RePEc:kap:iecepo:v:17:y:2020:i:1:d:10.1007_s10368-019-00446-1
    DOI: 10.1007/s10368-019-00446-1
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    More about this item

    Keywords

    Energy; Renewable; Non-renewable; Carbon emission; Economic growth; PMG; MG; Panel ARDL; G7;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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