A reassessment of energy and GDP relationship: the case of Australia
Article
Article Title | A reassessment of energy and GDP relationship: the case of Australia |
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ERA Journal ID | 5894 |
Article Category | Article |
Authors | Shahiduzzaman, Md. (Author) and Alam, Khorshed (Author) |
Journal Title | Environment, Development and Sustainability: a multidisciplinary approach to the theory and practice of sustainable development |
Journal Citation | 16 (2), pp. 323-344 |
Number of Pages | 22 |
Year | 2014 |
Publisher | Springer |
Place of Publication | Dordrecht, Netherlands |
ISSN | 1387-585X |
1573-2975 | |
Digital Object Identifier (DOI) | https://doi.org/10.1007/s10668-013-9479-4 |
Web Address (URL) | http://link.springer.com/article/10.1007%2Fs10668-013-9479-4 |
Abstract | This paper investigates the long- and short-run relationships between energy consumption and economic growth in Australia using the bound testing and the ARDL approach. The analytical framework utilized in this paper includes both production and demand side models and a unified model comprising both production and demand side variables. The energy-GDP relationships are investigated at aggregate as well as several disaggregated energy categories, such as coal, oil, gas and electricity. The possibilities of one or more structural break(s) in the data series are examined by applying the recent advances in techniques. We find that the results of the cointegration tests could be affected by the structural break(s) in the data. It is, therefore, crucial to incorporate the information on structural break(s) in the subsequent modelling and inferences. Moreover, neither the production side nor the demand side framework alone can provide sufficient information to draw an ultimate conclusion on the cointegration and causal direction between energy and output. When alternative frameworks and structural break(s) in time series are explored properly, strong evidence of a bidirectional relationship between energy and output can be observed. The finding is true at both the aggregate and the disaggregate levels of energy consumption. |
Keywords | causality; cointegration; energy consumption; GDP |
ANZSRC Field of Research 2020 | 440499. Development studies not elsewhere classified |
380105. Environment and resource economics | |
380203. Economic models and forecasting | |
Public Notes | © 2013 Springer Science+Business Media Dordrecht. Published online 3 July 2013. Permanent restricted access to published version in accordance with the copyright policy of the publisher. |
Byline Affiliations | Australian Centre for Sustainable Business and Development |
Institution of Origin | University of Southern Queensland |
https://research.usq.edu.au/item/q1zx2/a-reassessment-of-energy-and-gdp-relationship-the-case-of-australia
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