Abstract
Over two decades ago, Stern (1993) published evidence in this journal of unidirectional Granger-causality running from GDP to a raw measure of energy use, from a weighted measure of energy use to GDP, and of other relations pertaining to labor and capital. In this paper we verify the original results and conduct a two-fold reanalysis: on one hand we revisit Granger-causality using the Toda and Yamamoto (TY) procedure to account for integrated series, and on the other we study super exogeneity to establish causal relations between the series. Our verification exercise confirms the original results, and with the TY procedure we achieve a positive reanalysis of the Granger-causality relations between GDP and energy. Super exogeneity shows that labor and capital cause GDP and energy use, and thus highlight the importance of correctly interpreting econometric procedures. These results enhance the reliability of the energy-GDP nexus literature.
Published Version
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