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Handbook of Energy and Environment Policy

Edited By Celil Aydin and Burak Darici

The book deals with the broad perspectives on the energy and environment topics and questions the traditional view on energy and environment policy and issues. Nowadays, energy and environmental issues can be accepted as the related subjects by the whole world. The link between energy and environment is backed to the time when only nature's primary resources were used. Primitive societies’ energy demand was small compared to the forces of the environment. With the emergence of industrial nations, the importance of energy and environment relation appeared again.

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4 Energy Consumption and Economic Growth: An Econometric Analysis for OECD Countries

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Aytaç Pekmezci and Kurtuluş Bozkurt

4   Energy Consumption and Economic Growth: An Econometric Analysis for OECD Countries

Introduction

The relationship between energy consumption and economic growth has become an important field of study in economics literature, especially after the 1974 oil crisis. On the analysis of the relationship between energy consumption and economic growth, different application results have been obtained for different sample groups, and cointegration and causality analyses have been performed. At this point, the studies of Granger (1969) provide important implications.

When examined, applied studies conducted in the literature show that there are one-way or two-way relationships between energy consumption and economic growth. However, some studies show the exact opposite. Aforementioned studies are also in conflict in the sense that the applied econometric practices and data sets have differences. The present study was aimed to be enriched by using both time series-based cointegration and causality and panel cointegration analyses. Whether there is a relationship between energy consumption and economic growth for OECD countries is analyzed in this study.

In this study, the relationship between energy consumption and economic growth, investigated by numerous economists since the 1980s, is aimed to be analyzed within theoretical and empirical frameworks. First, the literature about the subject is reviewed. The studies using the time series analysis and panel cointegration analysis methods and empirically testing the relationship between energy consumption and economic growth are presented in a detailed literature summary.

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