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The energy-growth nexus reconsidered: Persistence and causality

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  • Carmona, Mónica
  • Congregado, Emilio
  • Feria, Julia
  • Iglesias, Jesús

Abstract

This article applies a recent econometric framework to the analysis of the relationship between energy consumption and economic growth in the US, which allows a joint study of causality and persistence. We provide evidence suggesting a nonlinear relationship with a structural break. In the most recent regime, we find that GDP causes energy consumption (and vice versa). Furthermore, both series show persistence, i.e., cyclical and natural components do not evolve independently. Thus, policies oriented to the reduction of energy consumption could constrain economic growth, and policy shocks can have permanent effects.

Suggested Citation

  • Carmona, Mónica & Congregado, Emilio & Feria, Julia & Iglesias, Jesús, 2017. "The energy-growth nexus reconsidered: Persistence and causality," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 342-347.
    • Handle: RePEc:eee:rensus:v:71:y:2017:i:c:p:342-347
    DOI: 10.1016/j.rser.2016.12.060
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