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Analyzing Energy Consumption and GDP Nexus Using Maximum Entropy Bootstrap: The Case of Turkey

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  • A. Talha Yalta

Abstract

We employ a maximum entropy bootstrap based framework to analyze the energy consumption and real GDP nexus between 1950 and 2006 in Turkey. Our approach provides more accurate inference in comparison to conventional hypothesis tests based on asymptotic theory. It also avoids preliminary testing and shape-destroying transformations such as differencing and detrending. The bivariate analysis as well as a multivariate framework controlling for exchange rate and oil prices shows no evidence of a causal relation. Our results are robust to both the number of lags and the time period chosen. We also perform a cointegration analysis of the data and point out a common misunderstanding in the literature regarding the concept of causation.
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  • A. Talha Yalta, 2011. "Analyzing Energy Consumption and GDP Nexus Using Maximum Entropy Bootstrap: The Case of Turkey," Working Papers 1103, TOBB University of Economics and Technology, Department of Economics.
    • Handle: RePEc:tob:wpaper:1103
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    Cited by:

    1. Hrishikesh Vinod & Lekha S. Chakraborty & Honey Karun, 2014. "If Deficits Are Not the Culprit, What Determines Indian Interest Rates? An Evaluation Using the Maximum Entropy Bootstrap Method," Economics Working Paper Archive wp_811, Levy Economics Institute.
    2. Rohin Anhal, 2013. "Causality between GDP, Energy and Coal Consumption in India, 1970-2011: A Non-parametric Bootstrap Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 3(4), pages 434-446.
    3. A. Talha Yalta, 2013. "Small Sample Bootstrap Inference of Level Relationships in the Presence of Autocorrelated Errors: A Large Scale Simulation Study and an Application in Energy Demand," Working Papers 1301, TOBB University of Economics and Technology, Department of Economics.
    4. A. Talha Yalta, 2013. "The Dynamics of Road Energy Demand and Illegal Fuel Activity in Turkey: A Rolling Window Analysis," Working Papers 1304, TOBB University of Economics and Technology, Department of Economics, revised Jul 2013.
    5. Haoqi Qian & Zhengyu Shi & Libo Wu, 2021. "Inferring Economic Condition Uncertainty from Electricity Big Data," Papers 2107.11593, arXiv.org, revised May 2023.
    6. Zeren, Feyyaz & Akkuş, Hilmi Tunahan, 2020. "The relationship between renewable energy consumption and trade openness: New evidence from emerging economies," Renewable Energy, Elsevier, vol. 147(P1), pages 322-329.
    7. Yang, Xue & Xu, He & Su, Bin, 2022. "Factor decomposition for global and national aggregate energy intensity change during 2000–2014," Energy, Elsevier, vol. 254(PB).
    8. Zeinab Zanjani & Pedro Macedo & Isabel Soares, 2021. "Investigating Carbon Emissions from Electricity Generation and GDP Nexus Using Maximum Entropy Bootstrap: Evidence from Oil-Producing Countries in the Middle East," Energies, MDPI, vol. 14(12), pages 1-22, June.
    9. Galip Altinay & A. Talha Yalta, 2016. "Estimating the evolution of elasticities of natural gas demand: the case of Istanbul, Turkey," Empirical Economics, Springer, vol. 51(1), pages 201-220, August.
    10. Meira, Erick & Cyrino Oliveira, Fernando Luiz & de Menezes, Lilian M., 2022. "Forecasting natural gas consumption using Bagging and modified regularization techniques," Energy Economics, Elsevier, vol. 106(C).
    11. Alam, Mohammad Jahangir & Ahmed, Mumtaz & Begum, Ismat Ara, 2017. "Nexus between non-renewable energy demand and economic growth in Bangladesh: Application of Maximum Entropy Bootstrap approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 399-406.
    12. Zhang, Chi & Zhou, Kaile & Yang, Shanlin & Shao, Zhen, 2017. "On electricity consumption and economic growth in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 353-368.
    13. Pirlogea, Corina & Cicea, Claudiu, 2012. "Econometric perspective of the energy consumption and economic growth relation in European Union," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 5718-5726.
    14. Aqil Khan & Mumtaz Ahmed & Salma Bibi, 2019. "Financial development and economic growth nexus for Pakistan: a revisit using maximum entropy bootstrap approach," Empirical Economics, Springer, vol. 57(4), pages 1157-1169, October.
    15. A. Yasemin Yalta, 2011. "New Evidence on FDI-Led Growth: The Case of China," Working Papers 1107, TOBB University of Economics and Technology, Department of Economics.
    16. Talha Yalta, A. & Cakar, Hatice, 2012. "Energy consumption and economic growth in China: A reconciliation," Energy Policy, Elsevier, vol. 41(C), pages 666-675.
    17. Dogan, Eyup & Sebri, Maamar & Turkekul, Berna, 2016. "Exploring the relationship between agricultural electricity consumption and output: New evidence from Turkish regional data," Energy Policy, Elsevier, vol. 95(C), pages 370-377.
    18. Al-mulali, Usama & Lee, Janice YM & Hakim Mohammed, Abdul & Sheau-Ting, Low, 2013. "Examining the link between energy consumption, carbon dioxide emission, and economic growth in Latin America and the Caribbean," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 42-48.
    19. Araç, Ayşen & Hasanov, Mübariz, 2014. "Asymmetries in the dynamic interrelationship between energy consumption and economic growth: Evidence from Turkey," Energy Economics, Elsevier, vol. 44(C), pages 259-269.
    20. Yalta, A. Yasemin, 2013. "Revisiting the FDI-led growth Hypothesis: The case of China," Economic Modelling, Elsevier, vol. 31(C), pages 335-343.
    21. Mohamed Abdouli and Sami Hammami, 2017. "Exploring Links between FDI Inflows, Energy Consumption, and Economic Growth: Further Evidence from MENA Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(1), pages 95-117, March.
    22. A. Talha Yalta, 2016. "Bootstrap Inference of Level Relationships in the Presence of Serially Correlated Errors: A Large Scale Simulation Study and an Application in Energy Demand," Computational Economics, Springer;Society for Computational Economics, vol. 48(2), pages 339-366, August.
    23. Okyay U an & Ebru Ar c o lu & Fatih Y cel, 2014. "Energy Consumption and Economic Growth Nexus: Evidence from Developed Countries in Europe," International Journal of Energy Economics and Policy, Econjournals, vol. 4(3), pages 411-419.
    24. Ahmed, Mumtaz & Riaz, Khalid & Maqbool Khan, Atif & Bibi, Salma, 2015. "Energy consumption–economic growth nexus for Pakistan: Taming the untamed," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 890-896.
    25. Hbib Sekrafi & Asma Sghaier, 2018. "Examining the Relationship Between Corruption, Economic Growth, Environmental Degradation, and Energy Consumption: a Panel Analysis in MENA Region," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 963-979, September.

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