ANALYZING OF THE VALIDITY OF ENERGY-GROWTH HYPOTHESIS IN N-11 COUNTRIES

Ebru Çağlayan-Akay,Zamira Oskonbaeva

doi:10.15637/jlecon.141

Abstract

This study aims to determine which energy-growth hypothesis is valid in Next-11 countries. We adopt a panel estimation techniques for the period of 1984-2010 to examine the possibility of growth, conservative, feedback, or neutrality hypotheses for Next-11 countries. Firstly, second generation unit root test are used to investigate stationarity properties of the variables because of the cross-sectional dependence.Then a panel cointegration and panel causality approach are proposed to examine the causal relationship between the variables. Finally, panel vector autoregression model, impulse-response and variance decomposition analysis are applied using generalized moment methods. The findings obtained from panel Granger causality test suggests that there is evidence of uni-directional causality between renewable energy consumption and economic growth in the short-term, which is consistent with the growth hypothesis. It is also found that the responses of growth to a shock of renewable energy consumption are positive. Since there is evidence indicating that renewable energy consumption may trigger economic growth.

Highlights

The ssue of econom c growth and energy consumpt on relat onsh p becomes a hot top c and t has been comprehens vely exam ned by researchers and sc ent sts
F rstly panel un t root test and panel co ntegrat on tests have been appl ed n order to determ ne the ntegrat on propert es and nvest gate the presence of long-run relat onsh ps among var ables
These results prov de emp r cal ev dence n favor of the val d ty of growth hypothes s between econom c growth and renewable energy consumpt on

Summary

INTRODUCTION

The ssue of econom c growth and energy consumpt on relat onsh p becomes a hot top c and t has been comprehens vely exam ned by researchers and sc ent sts. Accord ng to F gure 3 t can be observed that Turkey, V etnam and Mex co are the countr es w th the h ghest renewable energy consumpt on. Accord ng to the Department of Energy, the Ph l pp nes s the world's second-b ggest geothermal producer next to the Un ted States of Amer ca It s the f rst among the members of the Assoc at on of Southeast As an Nat ons (ASEAN) to nvest n large-scale solar and w nd technolog es. W th the country’s untapped renewable energy potent al, the Ph l pp nes s pred cted to be the world leader n geothermal energy, the largest producer of w nd power, and the solar manufactur ng center n Southeast As a (Senate Econom c Plann ng Off ce (SEPO), 2014). They can take env ronmental benef ts from renewable energy resources

LITERATURE REVIEW OF ENERGY-GROWTH HYPOTHESIS

DATA AND VARIABLES

ECONOMETRIC METHODOLOGY AND RESULTS

CONCLUSION