On the Relationship between Disaggregated Energy Production and GDP in Italy
ENERGY & ENVIRONMENT, Vol. 23, No. 8, 2012
19 Pages Posted: 2 Oct 2013
Date Written: 2012
This paper tries to assess the relationship between disaggregate energy production and real aggregate income in Italy by undertaking cointegration analyses using annual data from 1883 to 2009. After a brief introduction, a survey of the economic literature on this issue is shown, before discussing the data and introducing some econometric techniques. Stationarity tests reveal that the series are non-stationary, or I(1). Cointegration analyses reveal that there is a long-run relationship between GDP and geothermoelectric production in the 1919-1939 period. Whilst, for the post-war years, we find a cointegration relationship for all sources of energy. Causality tests roughly confirm a bi-directional flow in the long-run, so that energy production and economic growth complement each other, since economic growth may demand more energy, whereas more energy consumption may also induce economic growth.
Keywords: Energy policies, energy sources, GDP, stationarity, cointegration, causality, Italy
JEL Classification: B22, C22, N54, Q43
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