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Economic Growth, Energy Intensity and the Energy Mix

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  • Díaz, Antonia
  • Marrero, Gustavo
  • Puch, Luis A.
  • Rodríguez, Jesús

Abstract

This paper explores how changes in energy intensity and the switch to renewables can boost economic growth. To do so, we implement a dynamic panel data approach on a sample of 134 countries over the period 1960 to 2010. We incorporate a set of control variables, related to human and physical capital, socio-economic conditions, policies and institutions, which have been widely used in the literature on economic growth. Given the current state of technology, improving energy intensity is growth enhancing at the worldwide level. Moreover, conditional to energy intensity, moving from fossil fuels to frontier renewables (wind, solar, wave or geothermic) is also positively correlated with growth. Our results are robust to the specification of the dynamic panel with respect to alternative approaches (pooled OLS, within group or system GMM), and to alternative specifications (accounting for heterogeneity across countries, a set of institutional factors, and other technical aspects).

Suggested Citation

  • Díaz, Antonia & Marrero, Gustavo & Puch, Luis A. & Rodríguez, Jesús, 2019. "Economic Growth, Energy Intensity and the Energy Mix," UC3M Working papers. Economics 28461, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:28461
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    Keywords

    Growth;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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