Energy and national income in Korea: further evidence on the role of omitted variables

Abstract

Results of this paper indicate that the real oil price is a major determinant of real national income and energy consumption. The combined effects of real money and real government expenditure on real income and energy consumption are also substantial. A lack of causality or the causality between energy and real income in prior studies is due to the omitted variables. Results also confirm that the two oil price shocks combined adversely affected real national income.