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Causality between Energy Consumption and GDP: Evidence from 30 OECD and 78 Non-OECD Countries

  • Jaruwan Chontanawat

    (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

  • Lester C Hunt

    ()

    (Surrey Energy Economics Centre (SEEC), Department of Economics, University of Surrey)

  • Richard Pierse

    (Department of Economics, University of Surrey)

Energy arguably plays a vital role in economic development. Hence many studies have attempted to test for causality between energy and economic growth; however, no consensus has emerged. This paper, therefore, tests for causality between energy and GDP using a consistent data set and methodology for 30 OECD and 78 non-OECD countries. Causality from aggregate energy consumption to GDP and GDP to energy consumption is found to be more prevalent in the developed OECD countries compared to the developing non-OECD countries; implying that a policy to reduce energy consumption aimed at reducing emissions is likely to have greater impact on the GDP of the developed rather than the developing world.

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File URL: http://www.seec.surrey.ac.uk/Research/SEEDS/SEEDS113.pdf
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Paper provided by Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey in its series Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) with number 113.

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Length: 64 pages
Date of creation: Jun 2006
Date of revision:
Publication status: Published in The Journal of Policy Modeling, 30(2), 2008, pp. 209-220. (An abridged version with different title)
Handle: RePEc:sur:seedps:113
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Phone: +44(0)1483 686956
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