Testing the relationship between energy consumption and economic growth in China

Abstract

This paper applies the cointegration tests and error correction models in panel data to investigate the causal relationship between energy consumption and economic growth. The results show that there is long-run unidirectional causality running from energy consumption to economic growth in eastern, central and western region of China. In addition, there is just short-run unidirectional causality running from energy consumption to economic growth in eastern and central region of China, but in western region, there is bidirectional causality running from energy consumption to economic growth in short run.