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The Granger causal relationship between energy consumption and economic growth for eight European countries

Theodoridis, Dimitrios LU (2013) EKHR72 20131
Department of Economic History
Abstract (Swedish)
Motivated by the rising importance of today’s environmental issues and more specifically the role of energy conservation policies, the current study investigates the Granger causal relationship between energy consumption and economic growth in eight European countries. Using a large dataset that overall spans from 1800-2009 the study employs the Toda-Yamamoto procedure and cointegration analysis with and without structural breaks in order to specify the Granger causality between the two variables both in a historical perspective but also more recently, after the third Industrial Revolution. The main focus is placed on the effect that energy conservation policies could potentially have on the growth potentials of each country.
The results,... (More)
Motivated by the rising importance of today’s environmental issues and more specifically the role of energy conservation policies, the current study investigates the Granger causal relationship between energy consumption and economic growth in eight European countries. Using a large dataset that overall spans from 1800-2009 the study employs the Toda-Yamamoto procedure and cointegration analysis with and without structural breaks in order to specify the Granger causality between the two variables both in a historical perspective but also more recently, after the third Industrial Revolution. The main focus is placed on the effect that energy conservation policies could potentially have on the growth potentials of each country.
The results, clearly suggest that historically the relationship between energy consumption and economic growth is not neutral for all countries, while in some cases there is evidence that energy conservation policies could actually be a threat to economic growth. More importantly though, it is found that the relationship between the energy consumption and economic growth has changed after the 1970s suggesting that today’s energy conservation policies can actually be in line with a more environmentally sustainable growth pattern in most countries. The only exception is the arbitrary case of Portugal where a causal relationship from energy consumption to economic growth could still be in place. (Less)
Please use this url to cite or link to this publication:
author
Theodoridis, Dimitrios LU
supervisor
organization
course
EKHR72 20131
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Economic growth, energy, Granger causality
language
English
id
3864098
date added to LUP
2013-06-28 15:39:59
date last changed
2013-06-28 15:39:59
@misc{3864098,
  abstract     = {Motivated by the rising importance of today’s environmental issues and more specifically the role of energy conservation policies, the current study investigates the Granger causal relationship between energy consumption and economic growth in eight European countries. Using a large dataset that overall spans from 1800-2009 the study employs the Toda-Yamamoto procedure and cointegration analysis with and without structural breaks in order to specify the Granger causality between the two variables both in a historical perspective but also more recently, after the third Industrial Revolution. The main focus is placed on the effect that energy conservation policies could potentially have on the growth potentials of each country.
The results, clearly suggest that historically the relationship between energy consumption and economic growth is not neutral for all countries, while in some cases there is evidence that energy conservation policies could actually be a threat to economic growth. More importantly though, it is found that the relationship between the energy consumption and economic growth has changed after the 1970s suggesting that today’s energy conservation policies can actually be in line with a more environmentally sustainable growth pattern in most countries. The only exception is the arbitrary case of Portugal where a causal relationship from energy consumption to economic growth could still be in place.},
  author       = {Theodoridis, Dimitrios},
  keyword      = {Economic growth,energy,Granger causality},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Granger causal relationship between energy consumption and economic growth for eight European countries},
  year         = {2013},
}