Empirical study of the relationship between global energy consumption and economic growth

Abstract

The construction of the global energy internet is a historical transformation from the traditional concept of energy development to a up-to-date one, which will establish a new pattern of world energy development. There is a close relationship between and energy consumption and economic growth. This paper makes the empirical study of the relationship between energy consumption and economic growth in a global perspective. Based on adequate historical data, this paper studies the long-term co-integration and causality relationships between global energy consumption and economic growth by co-integration test, error correction model and Granger causality test. Worldwide energy consumption, electricity consumption and economic growth are then organized into one unified framework through vector auto-regression (VAR) model. The dynamic relationships and interactions are deduced by impulse response function and variance decomposition method. The result shows that constructing global energy internet to meet global electricity demand with clean and green alternatives are effective measures to ensure the rapid and sustainable development of the economy.