ENERGY CONSUMPTION AND ECONOMIC GROWTH IN TURKEY: COINTEGRATION AND CAUSALITY ANALYSIS

KAPLAN M., OZTURK I., KALYONCU H.

ROMANIAN JOURNAL OF ECONOMIC FORECASTING, cilt.14, sa.2, ss.31-41, 2011 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 14 Sayı: 2
  • Basım Tarihi: 2011
  • Dergi Adı: ROMANIAN JOURNAL OF ECONOMIC FORECASTING
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.31-41
  • Anahtar Kelimeler: Energy consumption, Economic growth, Causality, Cointegration, Turkey, ERROR-CORRECTION, TIME-SERIES, UNIT-ROOT, REAL INCOME, GDP, EMISSIONS, PRICES, KOREA
  • İstanbul Üniversitesi Adresli: Hayır

Özet

This paper examines the causal relationship between energy consumption and economic growth for Turkey during 1971-2006. We employed two multivariate models, namely demand model and production model, based on vector error correction model. Then, we tested Granger causality after finding cointegration among variables for the both models. The results indicate that energy consumption and economic growth are cointegrated and there is bidirectional causality running from energy consumption to economic growth and vice versa. This means that an increase in energy consumption directly affects economic growth and that economic growth also stimulates further energy consumption. Consequently, we conclude that energy is a limiting factor to economic growth in Turkey and, hence, shocks to energy supply will have a negative impact on economic growth and vice versa.