AN ECONOMETRIC ANALYSIS OF ENERGY CONSUMPTION AND ECONOMIC GROWTH IN TURKEY
AN ECONOMETRIC ANALYSIS OF ENERGY CONSUMPTION AND ECONOMIC GROWTH IN TURKEY
ABSTRACT
It is commonly maintained that energy is an imporant input of industrial growth and, in this way, economical development. The scarcity of energy resources in the world make the relation between economic development and energy consumption more significant. In this study, the possible cointegration is inspected by Engle-Granger and Johansen Tests and the direction of the causality is searched by Granger causality test. The analysis showed that there is a long and short term relationship between economic growth and energy consumption in Turkey fort he period of 1980-2006.
1. INTRODUCTION
Since the Industrial Revolution, the demand for energy has followed an increasing trend, globally. Due to the unequable distrubition of available energy resources in the world and increasing demand for these resources, countries have started to search new energy methods for decades.
Energy, as a production factor, is one of the most significant inputs of industrial and economical development. Especially after the oil crisis in 1973 and its destructive impacts on economies, the relation between energy and economic growth have been begun to study. However, there is still a conflict about the direction of the causality relationship between them. There are different researches on whether rising energy consumption triggers to economic growth or economic growth causes an increase in energy consumption, and they have been subjected to emprical challenges.
Particularly after 1980, depending on the population growth and industrialization process, it can be seen that there is a significant increase in energy consumption in Turkey, also. Neoliberal economic policies that based on imports have brought a decline in agriculture and a rise in industry in this period. This changing perspective in Turkish economy have caused to occur an increase in the demand for energy resources such as oil,
ABSTRACT
It is commonly maintained that energy is an imporant input of industrial growth and, in this way, economical development. The scarcity of energy resources in the world make the relation between economic development and energy consumption more significant. In this study, the possible cointegration is inspected by Engle-Granger and Johansen Tests and the direction of the causality is searched by Granger causality test. The analysis showed that there is a long and short term relationship between economic growth and energy consumption in Turkey fort he period of 1980-2006.
1. INTRODUCTION
Since the Industrial Revolution, the demand for energy has followed an increasing trend, globally. Due to the unequable distrubition of available energy resources in the world and increasing demand for these resources, countries have started to search new energy methods for decades.
Energy, as a production factor, is one of the most significant inputs of industrial and economical development. Especially after the oil crisis in 1973 and its destructive impacts on economies, the relation between energy and economic growth have been begun to study. However, there is still a conflict about the direction of the causality relationship between them. There are different researches on whether rising energy consumption triggers to economic growth or economic growth causes an increase in energy consumption, and they have been subjected to emprical challenges.
Particularly after 1980, depending on the population growth and industrialization process, it can be seen that there is a significant increase in energy consumption in Turkey, also. Neoliberal economic policies that based on imports have brought a decline in agriculture and a rise in industry in this period. This changing perspective in Turkish economy have caused to occur an increase in the demand for energy resources such as oil,