Energy Consumption and Economic Growth: Evidence from Nonlinear Panel Cointegration and Causality Tests

Tolga Omay, Mübariz Hasanov and Nuri Ucar ()

No 20130, Hacettepe University Department of Economics Working Papers from Hacettepe University, Department of Economics

Abstract: In this paper, we propose a nonlinear cointegration test for heterogeneous panels where the alternative hypothesis is an exponential smooth transition (ESTAR) model. We apply our tests for investigating cointegration relationship between energy consumption and economic growth for the G7 countries covering the period 1977-2007. Moreover, we estimate a nonlinear Panel Vector Error Correction Model in order to analyze the direction of the causality between energy consumption and economic growth. By using nonlinear causality tests we analyze the causality relationships in low economic growth and high economic growth regimes. Furthermore, we deal with the cross section dependency problem in both nonlinear panel cointegration test and nonlinear Panel Vector Error Correction Model.

Keywords: Nonlinear panel cointegration; nonlinear Panel Vector Error Correction Model; cross section dependency (search for similar items in EconPapers)
JEL-codes: C12 C22 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2012
New Economics Papers: this item is included in nep-ecm, nep-ene and nep-fdg
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Energy consumption and economic growth: Evidence from nonlinear panel cointegration and causality tests (2014)
Working Paper: Energy consumption and economic growth: evidence from nonlinear panel cointegration and causality tests (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hac:hacwop:20130

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