Energy Consumption, Economic Development and Prices: Time Series Evidence in CESEE Countries

10 Pages Posted: 5 Apr 2014

See all articles by Dushko Josheski

Dushko Josheski

University Goce Delcev

Marija Sopova

University Goce Delcev

Zlatko V. Sovreski

University Goce Delcev

Date Written: April 3, 2014

Abstract

This paper estimates the causal relationships between energy consumption and income for Albania, Bosnia and Herzegovina, Serbia, and Macedonia (CESEE - Central, Eastern and Southeastern Europe countries), using cointegration and error-correction modelling techniques. The results indicate that energy consumption, income and prices are second order cointegrated, except for Albania where there exist only one cointegration relationship. In the error correction mechanism on the long run the results show that for the selected countries in the cointegration relationship only inflation does seems to enter significantly in the equation. On a short run also only inflation seems to affect energy consumption, while energy consumption seems to affect income on short run, but only in Albania. This study supports the view that energy and income are neutral. This means that in these countries there is scope for energy conservation measures without severe impact on their economic growth.

Keywords: energy consumption, income, prices

JEL Classification: Q40, Q43

Suggested Citation

Josheski, Dushko and Sopova, Marija and Sovreski, Zlatko V., Energy Consumption, Economic Development and Prices: Time Series Evidence in CESEE Countries (April 3, 2014). Available at SSRN: https://ssrn.com/abstract=2420112 or http://dx.doi.org/10.2139/ssrn.2420112

Dushko Josheski (Contact Author)

University Goce Delcev ( email )

Stip
Macedonia
+389 32 550 000 (Phone)
+389 32 390 700 (Fax)

HOME PAGE: http://www.ugd.edu.mk/

Marija Sopova

University Goce Delcev ( email )

Stip
Macedonia

Zlatko V. Sovreski

University Goce Delcev ( email )

PO box 201
Stip, 2000
Macedonia

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