The Causal Relationship between Energy Use and Economic Growth in Switzerland

Genève: Haute Ecole de Gestion de Genève, 2011. 20 p. Cahier de Recherche No HES-SO/HEG-GE/C--11/1/1--CH

18 Pages Posted: 10 Jun 2011 Last revised: 18 Apr 2016

See all articles by Andrea Baranzini

Andrea Baranzini

University of Applied Sciences Western Switzerland - Geneva School of Business Administration

Markus Bareit

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Sylvain Weber

University of Neuchatel - Institute for Research in Economics (IRENE)

Nicole A. Mathys

University of Neuchatel - Faculty of Economics and Social Sciences; Federal Office for Spatial Development

Date Written: 2013

Abstract

This paper investigates the relationships between energy consumption and economic growth in Switzerland over the period 1950-2010. We apply bounds testing techniques to different energy types separately. Robustness tests are performed by including additional variables and restricting the analysis to the period after 1970. The results show that there exist robust long run relationships going from real GDP towards heating oil and electricity consumption. The relationship between heating oil and GDP is in fact bi-directional, although weaker from heating oil towards GDP. When investigating the period 1970-2010 only, the estimate of the long run elasticity of GDP with respect to electricity loses its statistical significance and that for heating oil becomes negative. Those results imply a possible decoupling between GDP growth and energy consumption, so that energy conservation policies would not have a negative impact on Swiss economic growth.

Keywords: Energy – GDP relationship, energy policy, fractional integration

JEL Classification: Q43, C32, O13

Suggested Citation

Baranzini, Andrea and Bareit, Markus and Weber, Sylvain and Mathys, Nicole Andréa, The Causal Relationship between Energy Use and Economic Growth in Switzerland (2013). Genève: Haute Ecole de Gestion de Genève, 2011. 20 p. Cahier de Recherche No HES-SO/HEG-GE/C--11/1/1--CH . Available at SSRN: https://ssrn.com/abstract=1861874 or http://dx.doi.org/10.2139/ssrn.1861874

Andrea Baranzini (Contact Author)

University of Applied Sciences Western Switzerland - Geneva School of Business Administration ( email )

CH-1227 Geneva
Switzerland
+41-22-388 1718 (Phone)
+41-22-388 1701 (Fax)

HOME PAGE: http://campus.hesge.ch/baranzia/

Markus Bareit

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

Sylvain Weber

University of Neuchatel - Institute for Research in Economics (IRENE) ( email )

A.-L. Breguet 2
Neuchatel, 2000
Switzerland
+41327181442 (Phone)

HOME PAGE: http://www2.unine.ch/irene/lang/en/collaborateurs/sylvain_weber

Nicole Andréa Mathys

University of Neuchatel - Faculty of Economics and Social Sciences ( email )

Neuchatel, 2000
Switzerland

Federal Office for Spatial Development ( email )

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