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How Linked are Energy and GDP: Reconsidering Energy-GDP Cointegration and Causality for Disaggregated OECD Country Data

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  • Liddle, Brantley

Abstract

This study is different from previous energy-GDP cointegration/causality ones by examining whether total energy consumption by industry causes total industry GDP (or vice versa), and whether per capita GDP causes per capita road and residential sector energy use (or vice versa) for a number of OECD countries. The primary findings are that nearly all of the data series analyzed are not cointegrated, and that by far the most robust result is that of Granger-noncausality; thus, developed economies may be far more flexible in their relation with energy than is often understood, and the price mechanism may be a none-too-costly policy instrument to lower energy consumption.

Suggested Citation

  • Liddle, Brantley, 2006. "How Linked are Energy and GDP: Reconsidering Energy-GDP Cointegration and Causality for Disaggregated OECD Country Data," MPRA Paper 52334, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52334
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    References listed on IDEAS

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    Cited by:

    1. Brantley Liddle, 2013. "The Energy, Economic Growth, Urbanization Nexus Across Development: Evidence from Heterogeneous Panel Estimates Robust to Cross-Sectional Dependence," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    2. Liddle, Brantley, 2009. "Long-Run Relationship among Transport Demand, Income, and Gasoline Price for the US," MPRA Paper 52080, University Library of Munich, Germany.
    3. Brant Liddle, 2007. "Long-Run Relation among Motor Fuel Use, Vehicle Miles Traveled, Income, and Gas Price for the US," Energy and Environmental Modeling 2007 24000032, EcoMod.
    4. Liddle, Brantley & Lung, Sidney, 2015. "Revisiting energy consumption and GDP causality: Importance of a priori hypothesis testing, disaggregated data, and heterogeneous panels," Applied Energy, Elsevier, vol. 142(C), pages 44-55.

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    More about this item

    Keywords

    Energy consumption disaggregated; Economic growth; Granger-causality; Cointegration; OECD countries;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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