ENERGY CONSUMPTION AND REAL GDP IN ASEAN

UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM NETHERLANDS VIETNAM – NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS ENERGY CONSUMPTION AND REAL GDP IN ASEAN By DUONG THIEN CHI MASTER OF ARTS IN DEVELOPMENT ECONOMICS Ho Chi Minh City, December 2015 i UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIET NAM NETHERLANDS VIETNAM – NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS ENERGY CONSUMPTION AND REAL GDP IN ASEAN By DUONG THIEN CHI Supervisor Dr NGUYEN NGOC THUY Ho Chi Minh City, December 2015 ii ACKNOWLEDGEMENT First of all, I would like to say gratefully thank to my supervisor Dr Nguyen Ngoc Thuy I cannot finish my thesis if not get the support and the advice from teacher Besides that, I want to say thank to Dr Vo Hong Duc who give me many useful and importance advice that help me very much through the time that I the thesis And I want to thank professors and the teacher staff of Viet Nam – Netherlands Program that gave many supports to me when I get difficult not only when I the thesis but also in studying progress Last, I want to thank my friends and my family always besides me iii ABBREVIATIONS ASEAN: The Association of Southeast Asian Nations ARDL: Autoregressive distributed lag ADF: Augmented Dickey-Fuller LLC: Levin at al FMOLS: Fully Modified Ordinary Least Square WB: World Bank VAR: Vector Autoregression VECM : Vector Error Correction Model iv ABSTRACT This paper aims to examine the relationship between real GDP and energy consumption in ASEAN The paper use the panel data collected from WorldBank from 1974 to 2014 The panel unit root tests, panel cointegration test and VECM Granger Causality test will be applied in this paper The result showed that there is a long-run causality from real real GDP to energy consumption and short-run unidirection causality from real GDP to energy consumption Besides that, there is positive effect of energy consumption, import, capital, human capital and negative effect of CO2 emission and export on real GDP in ASEAN Key word: economic growth, energy consumption, VECM, FMOLS v Table of Contents Chapter 1: Introduction 1.1.Problem statements 1.2 Research objectives 1.2.1 Research objectives 1.2.2 Main research question 1.3 Scope of study 1.4 The structure of study Chapter 2: Literature Reviews 2.1 Growth theory 2.2 Review of empirical studies 2.2.1 Energy, economic growth and real GDP 2.2.2 The papers that appied different methodologies 2.2.3 The papers that was added more variables Chapter 3: Data and Methodology 14 3.1 Data 14 Table : Descriptive statistics on data 17 GDP .17 ENERGY 17 EXPORT 17 HUMAN_ .17 IMPORT 17 CO2 17 CAPITAL .17 3.2 Methodology 18 3.2.1.Panel unit root test: .18 3.2.2 Panel cointegration tests .19 3.2.3 Granger Causality test 22 3.2.4 Fully modified ordinary least square (FMOLS) 24 Chapter : Overview of Energy Consumption 25 and real GDP in Asean .25 4.1 Individual country 25 vi 4.1.1 Brunei 25 4.1.2 Cambodia .26 4.1.3 Indonesia 27 4.1.4 Lao PDR .28 4.1.5 Malaysia .28 4.1.6 Myanmar 29 4.1.7 Philippines 30 4.1.8 Singapore .32 4.1.9 ThaiLand 33 4.1.10 Viet Nam 34 4.2 Country in aggregate 35 Chapter 5:Empirical Results 39 5.1 Panel Unit Root test 39 5.2 Panel cointegration test 39 5.3 Granger causality test .40 5.4 Fully modified ordinary least square (FMOLS): .42 Chapter 6: Conclusions and Policy Implications 45 6.1 Conclusions .45 6.2 Policy Implicantions 45 6.3 Limitations of the study 46 References .47 Appendices .52 Appendices : Unit root test for Capital variable at level .52 Appendices : Unit root test for Capital variable at first different 53 Appendices : Unit root test for Capital variable at level .54 Appendices 4: Unit root test for CO2 variable at level 55 Appendices 5: Unit root test for CO2 variable at first different 56 Appendices 6: Unit root test for Energy variable at level 57 Appendices 7: Unit root test for Export variable at level 58 Appendices 8: Unit root test for Export variable at first different 59 Appendices 9: Unit root test for real GDP variable at first level 60 Appendices 10: Unit root test for Export variable at level 61 Appendices 11: Unit root test for Human_capital variable at level .62 vii Appendices 12: Unit root test for Human_capital variable at first different 63 Appendices 13: Unit root test for Import variable at level 64 Appendices 14: Unit root test for Import variable at first different 65 Appendices 15: Panel Cointegration test .66 Appendices 16: Chosen lag order 67 Appendices 17: Vector Error Correction Model (Dependent variable : real GDP) 68 Appendices 18: Granger Causality Test for long-run .69 Appendices 19: Granger Causality Test for short-run 70 Appendices 20: Vector Error Correction Model (Dependent variable : Energy) 71 Appendices 21: Granger Causality Test for long-run .72 Appendices 22: Granger Causality Test for short-run 73 Appendices 23: Panel fully modified least squares 74 Appendices 24: Sumary of literature review 74 Time-series techniques, Hsiao version of the Granger-causality method 84 VEC model 84 viii LIST OF TABLE Table : Data definition 15 Table : Description data 17 Table 3: Description Energy Consumtion in Asean from 1974 to 2014 (kg of oil equivalent) 35 Table : Description Gross Domestic Product in Asean from 1974 to 2014 (billion USD) 36 Table 5: Result of panel LLC (2002) unit root test 38 Table 6: Panel Pedroni (1999) cointegration test 39 Table 7: Result of Granger causality test with VECM 39 Table 8: Result of Fully modified ordinary least square 41 ix LIST OF FIGURE Figure : Analytical framework of real GDP and Deternimant Factor 13 Figure 1: The Gross Domestic Product in Brunei from 1974 to 2014 25 Figure 2: The Energy Consumption in Brunei from 1974 to 2014 25 Figure 3: The Gross Domestic Product in Cambodia from 1974 to 2014 26 Figure 4: The Energy Consumption in Cambodia from 1974 to 2014 26 Figure 5: The Gross Domestic Product in Indonesia from 1974 to 2014 27 Figure 6: The Energy Consumption in Indonesia from 1974 to 2014 27 Figure 7: The Gross Domestic Product in Lao PDR from 1974 to 2014 28 Figure 8: The Gross Domestic Product in Malaysia from 1974 to 2014 28 Figure 9: The Energy Consumption in Malaysia from 1974 to 2014 29 Figure 10: The Gross Domestic Product in Myanmar from 1974 to 2014 29 Figure 11: The Energy Consumption in Myanmar from 1974 to 2014 30 Figure 12: The Gross Domestic Product in Phillipines from 1974 to 2014 30 Figure 13: The Energy Consumption in Phillipines from 1974 to 2014 31 Figure 14: The Gross Domestic Product in Singapore from 1974 to 2014 31 Figure 15: The Energy Consumption in Singapore from 1974 to 2014 32 Figure 16: The Gross Domestic Product in ThaiLand from 1974 to 2014 32 Figure 17: The Energy Consumption in ThaiLand from 1974 to 2014 33 Figure 18 : The Gross Domestic Product in Viet Nam from 1974 to 2014 33 Figure 19 : The Energy Consumption in Viet Nam from 1974 to 2014 34 x Appendices 19: Granger Causality Test for short-run Wald Test: Equation: Untitled Test Statistic F-statistic Chi-square Value df Probability 0.898577 7.188618 (8, 26) 0.5320 0.5164 Null Hypothesis: C(34)=C(35)=C(36)=C(37)=C(38)=C(39)= C(40)=C(41)=0 Null Hypothesis Summary: Normalized Restriction (= 0) C(34) C(35) C(36) C(37) C(38) C(39) C(40) C(41) Value Std Err 1.41E+08 -1.07E+08 -33698505 -2.15E+08 -1.50E+08 -67161082 -3.12E+08 -5.13E+08 1.20E+08 1.12E+08 1.18E+08 2.03E+08 2.25E+08 2.34E+08 2.33E+08 2.57E+08 Restrictions are linear in coefficients 70 Appendices 20: Vector Error Correction Model (Dependent variable : Energy) Vector Error Correction Estimates Date: 12/12/15 Time: 09:41 Sample (adjusted): 1977 2011 Included observations: 137 after adjustments Standard errors in ( ) & t-statistics in [ ] Cointegrating Eq: CointEq1 ENERGY(-1) 1.000000 EXPORT(-1) -2.49E-06 (3.1E-06) [-0.79222] CAPITAL(-1) 4.13E-06 (4.1E-06) [ 0.99906] CO2(-1) 2582.148 (3317.51) [ 0.77834] GDP(-1) -8.96E-07 (1.2E-06) [-0.75836] HUMAN_CAPITAL(-1) 76.66355 (1876.90) [ 0.04085] IMPORT(-1) 6.67E-06 (3.8E-06) [ 1.75632] C -202370.8 71 Appendices 21: Granger Causality Test for long-run Dependent Variable: D(ENERGY) Method: Panel Least Squares Date: 12/12/15 Time: 09:44 Sample (adjusted): 1983 2012 Periods included: 30 Cross-sections included: Total panel (unbalanced) observations: 84 D(ENERGY) = C(1)*( ENERGY(-1) + 3.93501243414E-08*EXPORT(-1) + 7.04799892943E-09*GDP(-1) + 12.2905065753*HUMAN_CAPITAL(-1) - 3.67963580823E-08*IMPORT(-1) - 2.97548630478E-08*CAPITAL(-1) - 741.845587239*CO2(-1) + 509.19647113 ) + C(2)*D(ENERGY(-1)) + C(3)*D(ENERGY(-2)) + C(4)*D(ENERGY(-3)) + C(5)*D(ENERGY(-4)) + C(6)*D(ENERGY(-5)) + C(7)*D(ENERGY(-6)) + C(8)*D(ENERGY(-7)) + C(9)*D(ENERGY(-8)) + C(10)*D(EXPORT(-1)) + C(11)*D(EXPORT(-2)) + C(12)*D(EXPORT(-3)) + C(13)*D(EXPORT(-4)) + C(14)*D(EXPORT( -5)) + C(15)*D(EXPORT(-6)) + C(16)*D(EXPORT(-7)) + C(17) *D(EXPORT(-8)) + C(18)*D(GDP(-1)) + C(19)*D(GDP(-2)) + C(20) *D(GDP(-3)) + C(21)*D(GDP(-4)) + C(22)*D(GDP(-5)) + C(23)*D(GDP( -6)) + C(24)*D(GDP(-7)) + C(25)*D(GDP(-8)) + C(26) *D(HUMAN_CAPITAL(-1)) + C(27)*D(HUMAN_CAPITAL(-2)) + C(28) *D(HUMAN_CAPITAL(-3)) + C(29)*D(HUMAN_CAPITAL(-4)) + C(30) *D(HUMAN_CAPITAL(-5)) + C(31)*D(HUMAN_CAPITAL(-6)) + C(32) *D(HUMAN_CAPITAL(-7)) + C(33)*D(HUMAN_CAPITAL(-8)) + C(34) *D(IMPORT(-1)) + C(35)*D(IMPORT(-2)) + C(36)*D(IMPORT(-3)) + C(37)*D(IMPORT(-4)) + C(38)*D(IMPORT(-5)) + C(39)*D(IMPORT(-6)) + C(40)*D(IMPORT(-7)) + C(41)*D(IMPORT(-8)) + C(42)*D(CAPITAL(-1)) + C(43)*D(CAPITAL(-2)) + C(44)*D(CAPITAL(-3)) + C(45)*D(CAPITAL( -4)) + C(46)*D(CAPITAL(-5)) + C(47)*D(CAPITAL(-6)) + C(48) *D(CAPITAL(-7)) + C(49)*D(CAPITAL(-8)) + C(50)*D(CO2(-1)) + C(51) *D(CO2(-2)) + C(52)*D(CO2(-3)) + C(53)*D(CO2(-4)) + C(54)*D(CO2( -5)) + C(55)*D(CO2(-6)) + C(56)*D(CO2(-7)) + C(57)*D(CO2(-8)) + C(58) C(1) C(2) C(3) R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood F-statistic Prob(F-statistic) Coefficient Std Error t-Statistic Prob -0.361325 0.165242 -0.340588 0.071926 0.172090 0.160433 -5.023605 0.960206 -2.122930 0.0000 0.3458 0.0434 0.992276 0.975342 38.57388 38686.54 -376.7529 58.59690 0.000000 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter Durbin-Watson stat 72 37.20632 245.6477 10.35126 12.02968 11.02597 1.753967 Appendices 22: Granger Causality Test for short-run Wald Test: Equation: Untitled Test Statistic F-statistic Chi-square Value df Probability 2.089763 16.71811 (8, 26) 0.0744 0.0332 Null Hypothesis: C(18)=C(19)=C(20)=C(21)=C(22)=C(23)= C(24)=C(25)=0 Null Hypothesis Summary: Normalized Restriction (= 0) C(18) C(19) C(20) C(21) C(22) C(23) C(24) C(25) Value Std Err 2.14E-09 4.62E-09 5.03E-09 4.38E-09 3.91E-09 -1.59E-09 -2.84E-09 -8.41E-10 1.56E-09 1.56E-09 1.79E-09 2.63E-09 2.78E-09 2.51E-09 1.99E-09 1.74E-09 Restrictions are linear in coefficients 73 Appendices 23: Panel fully modified least squares Dependent Variable: LGDP Method: Panel Fully Modified Least Squares (FMOLS) Date: 12/12/15 Time: 09:47 Sample (adjusted): 1975 2011 Periods included: 37 Cross-sections included: Total panel (unbalanced) observations: 168 Panel method: Grouped estimation Long-run covariance estimates (Bartlett kernel, Newey-West fixed bandwidth) Variable Coefficient Std Error t-Statistic Prob LEXPORT LENERGY LCO2 LCAPITAL LHUMAN_CAPITAL LIMPORT 0.616996 0.293678 -0.421543 0.558176 0.026202 -0.205049 0.069488 0.067697 0.051934 0.036649 0.037963 0.081814 8.879147 4.338122 -8.116891 15.23052 0.690210 -2.506275 0.0000 0.0000 0.0000 0.0000 0.4910 0.0132 R-squared Adjusted R-squared S.E of regression Durbin-Watson stat 0.974886 0.974111 0.201271 0.205562 Mean dependent var S.D dependent var Sum squared resid Long-run variance Appendices 24: Sumary of literature review 74 24.64814 1.250889 6.562607 0.002305 Serial Authors Ali T Akarca, Thomas Veach Long II Years Period 1979 January 1973– March 1978 Variables Total employment and total energy consumption Methods Dynamic time series methods Results Unidirectional causality running from energy to employment Andrew Phiri and Nyoni Bothwell 2015 1994/Q1 – 2014/Q4 Electricity consumption, economic growth and other growth Energy consumption and GDP Panel ECM No causal effects existing between electricity consumption and economic growth in the long-run Long-run and short-run causalities run from energy consumption to GDP Chien-Chiang Lee 2005 1975-2001 Chien-Chiang Lee , ChunPing Chang 2008 1971-2002 Energy consumption and real GDP Can Tansel Tugcu , Ilhan Ozturk , Alper Aslan 2012 1980-2009 Dipa Adhikari, Yanying Chen 2012 1990-2009 Renewable and non-renewable energy consumption and economic growth Energy consumption and economic growth 75 Panel unit root, heterogeneous panel cointegration, and panel-based error correction models Panel unit root, heterogeneous panel cointegration and panel-based error correction models Hatemi-J (2012), Panel ECM Panel unit root test, panel cointegration test and panel dynamic ordinary least squares (DOLS) Long-run unidirectional causality running from energy consumption to economic growth Bidirectional causality is found for all countries in case of classical production function Energy consumption caused economic growth for middle and lower middle income countries Economic growth caused energy consumption for low income countries Dipendra Sinha 2009 1975-2003 per capita GDP and per capita energy consumption Energy consumption and the gross-domestic product Evan Lau , Xiao-Hui Chye , Chee-Keong Choong 2011 1980-2006 Galip Altinay, Erdal Karagol 2005 1950–2000 Electricity consumption and real GDP 10 John AsafuAdjaye 2000 1971-1995 Energy consumption and income 11 Lin Hung-Pin 2014 1982-2011 renewable energy (RE) consumption and economic growth (EG) 76 Panel VECM two-way short-run, long-run and strong causality between the growth of GDP and growth of energy consumption Panel VECM Energy is a force for economic growth in the short-run, but in the long-run, the EC is fundamentally driven by economic growth The Zivot and Andrews Unidirectional causality running test, Dolado–Lütkepohl from the electricity consumption test using the VARs in to the income levels, and the standard Granger causality test Cointegration and Unidirectional Granger error-correction causality runs from energy to modelling techniques income for India and Indonesia Bidirectional Granger causality runs from energy to income for Thailand and the Philippines autoregressive short-run unidirectional distributed lag (ARDL) causality runs from EG to RE in bounds testing Italy and UK approach long-run unidirectional vector error-correction causalities run from RE to EG models for Germany, Italy, and UK a long-run unidirectional causality runs from EG to RE in USA, and Japan both long-run and strong unidirectional causalities run 12 Mehdi Ben Jebli and Slim Ben Youssef 2013 1980-2007 output, renewable and non-renewable energy consumption, and international trade OLS, FMOLS and DOLS estimates 13 Mehdi Ben Jebli and Slim Ben 2014 1971-2008 CO2 emissions, economic growth, combustible ewnewables and waste consumption panel FMOLS and DOLS estimates, VECM 14 N Bowden & J 2010 E Payne 1949-2006 Renewable, nonrenewable energy Toda-Yamamoto longrun causality tests 77 from RE to EG for Germany and UK both long-run and strong unidirectional causalities run from EG to RE in only USA In short-run, bidirectional causality between output and trade, bidirectional causality between non-renewable energy and trade, one way causality running from renewable energy to trade In the long-run, a bidirectional causality between renewable energy and imports and a unidirectional causality running from renewable energy to exports In term of short run, CO2 emissions caused real GDP Combustible renewable and waste consumption caused real GDP In term of long run, there is a unidirectional causality running from CO2 emissions, combustible renewable and waste consumption to GDP Bidirectional Granger-causality exists between commercial and consumption by sector and real Gross Domestic Product Granger-causality panel cointegration and error correction model, Pedroni's heterogeneous panel cointegration test panel error correction model, panel VECM 15 Nicholas Apergis , James E Payne 2010 1980-2005 energy consumption and economic growth 16 Nicholas Apergis , James E Payne , Kojo Menyah , Yemane Wolde-Rufael Sheng-Tung Chen, Hsiao-I Kuo, ChiChung Chen 2010 1984-2007 2007 1971-2001 CO2 emissions, nuclear energy consumption, renewable energy consumption, and economic growth GDP and electricity consumption Cheng, B.S 1995 1947-1990 17 18 Energy consumption and economic growth 78 The ECM approach, Granger causality test Hsiao`s version of the Granger causality The Phillips-Perron (PP) tests residential non-renewable energy consumption and real GDP Unidirectional causality from residential renewable energy consumption and industrial nonrenewable energy consumption, respectively to and real GDP short-run and long-run causality from energy consumption to economic growth Nuclear energy consumption had a negative relationship with emission Emission and renewable energy consumption had a positive relationship Uni-directional short-run causality running from economic growth to electricity consumption bi-directional long-run causality if the panel data procedure is implemented No causal linkages between energy consumption and economic growth 19 Paresh Kumar Narayan , Russell Smyth 2008 1972-2002 capital formation, energy consumption and real GDP Energy and employment panel unit root, panel cointegration, Granger causality and long-run structural estimation Double-filter and single-filter, the Haugh test, the Sim's test of causality and the generalized BoxJenkins capital formation and energy consumption Granger cause real GDP positively in the long run 20 Umit Erol, Eden S.H Yu 1987 January 1973 to June 1984 21 Khalifa H 2004 Ghal, M.I.T ElSakka 1961–1997 Capital, labor and energy and output growth Vector error-correction (VEC) model Johansen cointegration technique Granger-causality Bi-directional Granger-causality between output growth and energy use 22 Sławomir Śmiech Monika Papież 2013 1995-2010 energy consumption and economic growth Pedroni’s panel cointegration test, FMOLS Short-term bidirectional relationship between energy consumption and GDP 23 Sahbi FARHANI Jaleleddine BEN REJEB 2015 1971-2008 economic growth (GDP) and energy consumption (EC) Panel ECM Panel OLS, FMOLS and DOLS Sajal Ghosh 2002 1950-1951 and Electricity 1996-1997 consumption per capita and Gross long-run Granger causality running from GDP to EC for low and high income countries and bidirectional Granger causality between GDP and EC for the lower-middle and uppermiddle income countries Unidirectional Granger causality running from economic growth to electricity 24 79 Phillips–Perron tests Energy conservation would not lead to an increase or decrease in total employment Domestic Product per capita Real oil price, real national income and energy consumption Nonfarm employment , employment and energy consumption Energy consumption and GDP consumption 25 Yong U Glasure 2002 1960-1990 26 YONG U GLASURE & AIE-RIE LEE 1995 1973-1984 27 Yong U Glasure, Aie-Rie Lee 1998 1961-1990 28 George Hondroyiannis, Sarantis Lolosb, Evangelia Papapetrou 2002 1960-1996 Energy consumption, real GDP and price developments The vector errorcorrection model estimation Long-run relationship between the three variables 29 Bwo-Nung Huang, M.J Hwang, , C.W Yang 2008 1972-2002 Energy consumption and GDP The GMM-SYS approach No causal relationship ( low income group), economic growth leads energy consumption positively (lower and upper middle income groups) and economic growth leads energy consumption negatively (high income group) 80 Vector error correction models Bidirectional causation between energy consumption and real income Trivariate vector errorcorrection models Bidirectional causality between nonfarm employment and energy consumption and between total employment and energy consumption Bidirectional causality between GDP and energy consumption  Vector error correction model 30 Chien-Chiang Lee 2005 1975-2001 Energy consumption and GDP 31 Chien-Chiang Lee 2006 1960-2001 Energy consumption and GDP 32 Chien-Chiang Lee, Chun-Ping Chang 2008 1971-2002 Energy consumption and real GDP 33 Chien-Chiang Lee, Chun-Ping Chang, Pei-Fen Chen 2008 1960 – 2001 Energy consumption, the capital stock and economic growth 34 Abul M.M Masih Rumi Masih 1997 Energy consumption and economic growth Vector error correction model 35 Abul M.M Masih Rumi Masih Mohsen Mehrara 1998 1955-1991 for Korea; 19521992 for Taiwan 1955-1991 Vector error correction model 2007 1971-2002 Energy consumption, real income and prices Per capita energy consumption and Bidirectional relationship between the energy consumption and economic growth Increased growth leads to increased energy consumption Panel unit-root tests and panel cointegration Unidirectional strong causality from economic growth to 36 81 The panel unit root, heterogeneous panel cointegration, and panel-based error correction models Toda and Yamamoto Panel unit root, heterogeneous panel Cointegration and panel-based error correction models Granger causality model, error correction model Long-run and short-run causalities run from energy consumption to GDP Bi-directional causality in the United States and unidirectional running from energy consumption to GDP in Canada, Belgium, the Netherlands and Switzerland Long-run unidirectional causality running from energy consumption to economic growth Bi-directional causal linkages exist among energy consumption, the capital stock and economic growth the per capita GDP Capital formation, energy consumption and real GDP analysis Panel unit root, panel cointegration, Granger causality and long-run structural estimation 1970-1999 Capital, labor, energy and GDP Vector error correction model 2004 1981-2000 Energy, GDP , capital, labor and real energy price Vector error correction model Shyamal Paul, Rabindra N Bhattacharya 2004 1950-1996 Energy consumption and economic growth 41 Corina Pirlogea, Claudiu Cicea 2012 1990-2000 Energy consumption by fuel end economic growth Engle–Granger cointegration approach combined with the standard Granger causality test The standard Granger causality test 42 Ramazan Sari, Bradley T Ewing, 2008 2001-2005 Energy consumption and industrial output 37 Paresh Kumar Narayan, Russell Smyth 2008 1972-2002 38 Wankeun Oh, Kihoon Lee 2004 39 Wankeun Oh, Kihoon Lee 40 82 The autoregressive distributed lag (ARDL) approach developed by energy consumption Capital formation, energy consumption and real GDP are cointegrated and that capital formation and energy consumption Granger cause real GDP positively in the long run Long run bidirectional causal relationship between energy and GDP, and short run unidirectional causality running from energy to GDP No causality between energy and GDP in the short run and a unidirectional causal relationship running from GDP to energy in the long run Bi-directional causality exists between energy consumption and economic growth Renewable energy consumption influences on short run the economic in Romania and energy consumption with source natural gas causes economic growth on short-run in Spain Real output and employment are long run forcing variables for nearly all measures of Ugur Soytas and employment 43 Alice Shiu , Pun-Lee Lam 2004 1970-2000 Electricity consumption and real GDP 44 David I Stern 1993 1947-1990 45 Ugur Soytas , , Ramazan Sari 2003 1950-1992 GDP, energy use, capital stock and employment Energy consumption and income 46 Seung-Hoon Yoo 2005 1970-2002 47 Seung-Hoon Yoo 2006 1968-2002 48 Seung-Hoon Yoo 2006 1968-2002 49 Seung-Hoon Yoo 2006 1971-2002 Electricity consumption and economic growth Coal consumption and economic growth Oil consumption and economic growth Electricity consumption and 83 Pesaran and Pesaran disaggregate energy consumption Error-correction model Unidirectional Granger causality running from electricity consumption to real GDP Vector autoregression No evidence that gross energy (VAR), Granger use Granger causes GDP causality test VECM Bi-directional causality in Argentina, causality running from GDP to energy consumption in Italy and Korea, and from energy consumption to GDP in Turkey, France, Germany and Japan Hence, energy conservation may harm economic growth in the last four countries Co-integration and Bi-directional causality between error-correction models electricity consumption and economic growth Time-series techniques, Bi-directional causality running Granger-causality from coal consumption to based on erroreconomic growth correction model Time-series techniques, Bidirectional causality runs error-correction model from oil consumption to economic growth Error-correction model Bi-directional causality between electricity consumption and economic growth 50 Seung-Hoon Yoo, , Kun-Oh Jung 2005 1977-2002 Nuclear energy consumption and economic growth 51 Seung-Hoon Yoo, Yeonbae Kim 2006 1971-2002 Electricity generation and economic growth 52 Jia-Hai Yuan, , 2008 Jian-Gang Kang, Chang-Hong Zhao Zhao-Guang Hu 1963-2005 Output growth and energy use 84 economic growth in Malaysia and Singapore uni-directional causality runs from economic growth to electricity consumption in Indonesia and Thailand Error-correction model Unidirectional causality runs from nuclear energy consumption to economic growth Uni-directional causality Time-series techniques, running from economic growth to electricity generation Hsiao version of the Granger-causality method VEC model Existing Granger causality running from electricity and oil consumption to GDP, but does not exist Granger causality running from coal and total energy consumption to GDP short-run Granger causality exists from GDP to total energy, coal and oil consumption, but does not exist from GDP to electricity consumption