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Causality Between Energy and Output in the Long-Run

På svenska

Author

Summary, in English

Though there is a very large literature examining whether energy use Granger causes economic output or vice versa, it is fairly inconclusive. Almost all existing studies use relatively short time series, or panels with a relatively small time dimension. We apply Granger causality and cointegration techniques to a Swedish time series dataset spanning 150 years to test whether increases in energy use and energy quality have driven economic growth or vice versa. We show that these techniques are very sensitive to variable definition, choice of additional variables in the model, sample periods and size, and the introduction of structural breaks. The relationship between energy and growth may also have changed over time - energy causes output in the full sample while output causes energy use in recent smaller samples. Energy prices have a more robust causal impact on both energy use and output.

Publishing year

2013

Language

English

Pages

135-146

Publication/Series

Energy Economics

Volume

39

Document type

Journal article

Publisher

Elsevier

Topic

  • Economic History

Keywords

  • Energy
  • macroeconomics
  • Granger causality
  • cointegration
  • Sweden

Status

Published

ISBN/ISSN/Other

  • ISSN: 0140-9883