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Economic Growth and Electricity Consumption in 12 European Countries: A Causality Analysis Using Panel Data

  • Ciarreta Antuñano, Aitor
  • Zárraga Alonso, Ainhoa

We apply recent panel methodology to investigate the relationship between electricity consumption and real GDP for a set of 12 European Union countries using annual data for the period 1970-2004. Recently developed tests for panel unit roots, cointegration in heterogeneous panels and panel causality are employed. The results show a long-run relationship between the series. We estimate this relationship and test for causality. We find no short-run causality in any direction. These results might help to design appropriate electricity consumption policies in the sample countries, as well as investment policies in interconnections to build a single European market for electricity.

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File URL: http://hdl.handle.net/10810/5582
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Paper provided by Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) in its series BILTOKI with number 2008-04.

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Date of creation: 2008
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Handle: RePEc:ehu:biltok:200804
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Order Information: Postal: Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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