THE CAUSAL RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND GDP IN TURKEY

This paper attempts to investigate the short-run and long-run relationship and causality between energy consumption and economic growth during 1960-2006 period for Turkey. Johansen and Juselius cointegration method and vector error correction model (VECM) have been employed to examine this issue. Af...

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Bibliographic Details
Published in:Energy & environment (Essex, England) England), 2013-10, Vol.24 (5), p.727-734
Main Authors: Ozturk, Ilhan, Kaplan, Muhittin, Kalyoncu, Huseyin
Format: Article
Language:English
Subjects:
Applied sciences
Causality
Coefficients
Conservation
Economic data
Economic growth models
Economics
Energy
Energy conservation
Energy consumption
Energy economics
Energy policy
Exact sciences and technology
General aspects
General, economic and professional studies
Gross domestic product
Long run economic growth
Mathematical analysis
Mathematical models
Methodology. Modelling
Policies
Running
Turkeys
Vectors (mathematics)
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Summary:This paper attempts to investigate the short-run and long-run relationship and causality between energy consumption and economic growth during 1960-2006 period for Turkey. Johansen and Juselius cointegration method and vector error correction model (VECM) have been employed to examine this issue. After finding cointegration among variables, a VECM is estimated and the Granger causality tests were carried out based on a VECM. The results have shown that there is no short-run causality in both energy consumption and GDP models. The results also confirmed that there is unidirectional long-run causality among variables of interest and the direction of long-run causality is running from per capita GDP to per capita energy consumption. As a result, conservation hypothesis which postulates unidirectional causality from economic growth to energy consumption is confirmed for Turkey. Taken together, these empirical findings involve valuable information for policy makers.
ISSN:0958-305X
2048-4070
DOI:10.1260/0958-305X.24.5.727