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Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach

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  • Calcagnini, Giorgio
  • Giombini, Germana
  • Travaglini, Giuseppe

Abstract

In this paper we present a green growth model with energy and pollution. A structural VAR approach is used to test its empirical implications for the Italian economy. Data span over the 1961–2010 period. Our model develops the original contribution by Adom and Kwakwa (2014) [2] aimed at identifying the long-run forces driving the dynamics of a set of variables. Specifically, we identify the long- and short-run structural shocks of the variables of interest by means of restrictions from theory. Our results show that (1) the estimated conditional correlations of energy intensity and pollution per capita are positive for both supply and demand shocks; and (2) the impulse responses show a persistent increase of both energy intensity and pollution per capita to supply shocks. The main insight is that the VAR residuals are combinations of structural supply and demand shocks.

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  • Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
    • Handle: RePEc:eee:rensus:v:59:y:2016:i:c:p:1482-1492
    DOI: 10.1016/j.rser.2016.01.039
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    Keywords

    Energy; Pollution; Productivity; SVAR;
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