THE CAUSAL RELATIONSHIP BETWEEN ENERGY CONSUMPTION AND GDP IN TURKEY

OZTURK I., KAPLAN M., KALYONCU H.

ENERGY & ENVIRONMENT, vol.24, no.5, pp.727-734, 2013 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 24 Issue: 5
  • Publication Date: 2013
  • Doi Number: 10.1260/0958-305x.24.5.727
  • Journal Name: ENERGY & ENVIRONMENT
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.727-734
  • Keywords: Energy consumption, Economic growth, Causality, Turkey, ECONOMIC-GROWTH, UNIT-ROOT, TIME-SERIES, COINTEGRATION, EMISSIONS
  • Istanbul University Affiliated: No

Abstract

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.