ECONOMIC GROWTH, RENEWABLE ENERGY, AND INFLATION: INTERCONNECTIONS OF A TRIANGLE

Abstract

The primary objective of any nation's economy is to achieve economic stability and a high standard of living. This can be attained through sustainable economic growth. However, global economic competition often brings about challenges, one of which is the increasing demand for energy products driven by population growth. Historically, this demand has been predominantly met by fossil fuels, but due to resource depletion and environmental concerns, there has been a growing interest in alternative energy sources. This shift towards renewable energy has become a global trend. The energy sector serves as a key indicator of a nation's prosperity and development, with renewable energy production, transportation, and costs being vital metrics of development. For Turkey, like many developing nations, investing in renewable energy is crucial for sustainable growth. This study explores the relationship between renewable energy, economic growth, and inflation in Turkey from 1975 to 2022. It examines the process of economic growth in the first part, followed by an analysis of energy dynamics and inflation in subsequent sections. The study employs unit root tests such as ADF and PP, along with the Toda-Yamamoto causality test, using available data. The final results are then interpreted.