Halicioglu, Ferda (2010): A dynamic econometric study of income, energy and exports in Turkey.
Download (153kB) | Preview
This study attempts to examine empirically dynamic causal relationships between aggregate output, energy consumption, exports, capital and labour in the case of Turkey using the time series data for the period 1968-2008. This research tests the interrelationships between the variables using the bounds testing to cointegration procedure. The bounds test results indicate that there exists a long-run relationship between the variables in which the dependent variable is aggregate output. Within this study, three competing sets of hypotheses regarding the relationship between aggregate output, exports and energy consumption are tested. An augmented form of Granger causality analysis is conducted amongst the variables. In the long-run, causality runs interactively through the error correction term from labour, capital, exports and energy consumption to aggregate output. In the short-run, two important bilateral causalities were identified: between energy consumption and aggregate output, between exports and aggregate output. The short-run causality testing reveals further the existence of a unilateral causality running from exports to energy consumption too. The long-run relationship of aggregate output, energy consumption, exports, capital and labour equation is also checked for the parameter stability. The results also provide some important policy recommendations.
|Item Type:||MPRA Paper|
|Original Title:||A dynamic econometric study of income, energy and exports in Turkey|
|Keywords:||Aggregate output; energy consumption; capital; labour; cointegration; Granger causality; stability tests; Turkey|
|Subjects:||Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy
|Depositing User:||Ferda HALICIOGLU|
|Date Deposited:||17. Mar 2011 14:58|
|Last Modified:||30. Dec 2015 15:36|
 Kraft, J., Kraft, A. On the relationship between energy and GNP. Journal of Energy Development, 1978; 3: 401-403.
 Payne, J.P. Survey of the international evidence on the causal relationship between energy consumption and growth. Journal of Economic Studies, 2010;37:53-95.
 Stern, D. I. Energy use and economic growth in the USA: a multivariate approach. Energy Economics, 1993;15:137-150.
 Lutkepohl, H. Non-causality due to the omitted variables. Journal of Economics, 1982;19:367-378.
 Narayan, P.K., Smyth, R. Multivariate Granger causality between electricity consumption, exports, and GDP: evidence from a panel of Middle Eastern countries. Energy Policy, 2009;37:229-236.
 Lean, H.H., Smyth, R. On the dynamics of aggregate output, electricity consumption and exports in Malaysia: evidence from multivariate Granger causality tests. Applied Energy, 2010;87:1963-1971.
 Pesaran, M. H., Shin, Y., Smith, R. J. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics. 2001;16:289-326.
 Solow, R. Resources and economic growth. American Economic Review, 1978;22:5-11.
 Denison, E. Trends in American economic growth, 1929-1982. Brookings Institution, Washington, DC, 1985.
 Halicioglu, F. A multivariate causality analysis of export and growth for Turkey. EERI Research Papers, No.5, Brussels, Belgium, 2007.
 Soytas, U., Sari, R. Energy consumption, economic growth, and carbon emissions: challenges faced by an EU candidate member. Ecological Economics, 2009;68:1667-1675.
 Soytas, U., Sari, R. Energy consumption and GDP: causality relationship in G-7 countries and emerging markets. Energy Economics, 2003; 25:33-37.
 Altinay, G., Karagol, E. Electricity consumption and economic growth: evidence from Turkey. Energy Economics, 2005;27:849-856.
 Jobert, T., Karanfil, F. ectoral energy consumption by source and economic growth in Turkey. Energy Policy, 2007;35:5447-5456.
 Lise, W., Montfort, K.V. Energy consumption and GDP in Turkey: is there a co-integration relationship? Energy Economics, 2007; 29:1166-1178.  Narayan, P. K., Narayan, S., Prasad, A., 2008. A structural VAR analysis of electricity consumption and real GDP: evidence from the G7 countries. Energy Policy, 2008;36:2765-2769.
 Karanfil, F. Energy consumption and economic growth revisited: does the size of unrecorded economy matter ? Energy Policy, 2008;36:3029-3035.
 Erdal, G., Erdal, H., Esengun, K. The causality between energy consumption and economic growth in Turkey. Energy Policy, 2008;36:3838-3842.
 Giles, J.A. Williams, C.L. Export-led growth: a survey of the empirical literature and some none causality results. Part 1. Journal of International Trade and Economic Development, 2000;9:261-337.
 Kravis, I.B. Trade as handmaiden of growth: similarities between the nineteenth and twentieth centuries. Economic Journal,1970;80:.850-872.
 Lancaster, K. Intra-industry trade under perfect monopolistic competition. Journal of International Economics, 1980;10:151-175.
 Krugman, P.R. (“Import protection as export promotion” In H. Kierzkowski (ed.) Monopolistic Competition in International Trade. Oxford: Oxford University Press, 1984.
 Bhagwati, J.N. Protectionism. Cambridge MA: MIT Press. 1988.
 Helpman, E., Krugman, P.R. Market Structure and Foreign Trade. Cambridge, MA: MIT Press. 1985.
 Bahmani-Oskooee, M., Domac, F. Export growth and economic growth in Turkey: evidence from cointegration analysis. METU Studies on Development Studies, 1999; 22:67-77.
 Ozmen, E., Furtun, G. Export-led growth hypothesis and the Turkish data”, METU Studies in Development,1998;25:491-503.
 Ozturk, I., Acaravci, A. Testing the export-led growth hypothesis: empirical evidence from Turkey. The Journal of Developing Areas, 2010;44:245-254.
 Halicioglu, F. Residential electricity demand dynamics in Turkey. Energy Economics, 2007;29:199-210.
 Bilgin, C., Sahbaz, A. Causality relationship between growth and exports in Turkey. Gaziantep University Graduate Institute Journal, 2009;.8:177-198, (in Turkish).
 Hatemi-J, A., Iranddoust, M. Time series evidence for Balassa’s export led-growth hypothesis. Journal of International Trade and Economic Development, 2000; 9:355-365.
 Demirhan, E., Akcay, S. A causality analysis of export growth and economic growth in the selected MENA countries. Iktisat, Isletme ve Finans, 2000;5:124-131.
 Engle, R., Granger, C. 1987. Cointegration and error correction representation: estimation and testing. Econometrica, 1987;55: 251-276.
 Narayan, P. K. The Saving and investment nexus for China: evidence from cointegration tests. Applied Economics, 2005;37:1979-1990.
 Bentzen, J., Engsted, T., 2001. A revival of the autoregressive distributed lag model in estimating energy demand relationships. Energy;26:45-55.
 Lee, C.C., Chang, C.P., 2007. The impact of energy consumption on economic growth: evidence from linear and nonlinear models in Taiwan. Energy;32: 2282-2294.
 Amarawickrama, H.A., Hunt, L.C., 2008. Electricity demand for Sri Lanka: a time series analysis. Energy;35:724-739.
 Johansen, S., Juselius, K., 1990. Maximum likelihood estimation and inference on cointegration-with application to the demand for money. Oxford Bulletin of Economics and Statistics, 1990;52:169-210.
 Cheung, Y. W., Lai, K. S., 1993. Finite-sample sizes of Johansen’s likelihood ratio tests for cointegration. Oxford Bulletin of Economics and Statistics, 1993;55: 313-329.
 Pao, H.T., Tsai, C.M., 2011. Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy;36:865-693.
 Lean, H.H., 2010. Multivariate Granger causality between electricity generation, exports, prices and GDP in Malaysia. Energy;35;3640-3648.
 Loftalipour, M.R., Falabi, M.A., Asena, M., 2010. Economic growth, CO2 emissions, and fossil fuels consumption in Iran. Energy;35:5115-5120.
 Narayan, P. K., Smyth, R. Higher education, real income and real investments in China: evidence from Granger causality tests. Education Economics, 2006;14: 107-125.
 Beaudreu, B.C., 2010. On the methodology of energy-GDP causality tests. Energy;35:3535-3539.  Bahmani-Oskooee, M., Goswami, G. G., 2003. A disaggregated approach to test the J-curve phenomenon: Japan versus her major trading partners. Journal of Economics and Finance, 2003;27: 102-113.
 Chow, G. Test of equality between sets of coefficients in two linear regressions. Econometrica 1960;28: 591-605.
 Brown, R. L., Durbin, J., Evans, J. M., 1975. Techniques for testing the constancy of regression relations over time. Journal of the Royal Statistical Society, Series B, 1975;37: 149-163.
 Hansen, B. E., 1992. Tests for parameter instability in regressions with I(1) processes. Journal of Business and Economic Statistics,1992;10:321-335.
 Hansen, H., Johansen, S. Recursive Estimation in Cointegrated VAR Models. Institute of Mathematical Statistics, preprint no.1, January, University of Copenhagen, Copenhagen, 1993.
 Gujarati, D. N. Basic Econometrics, 4th ed. McGraw Hill-Publishing, Boston, 2003.
 Dickey, D. A., Fuller, W. A. Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica 1981;49: 1057-1072.
 Phillips, P. C. B., Perron, P. 1988. Testing for a unit root in time series regression. Biometrika, 1988;75:335-346.
 McKinnon, J.G. Critical value for cointegration tests. In: Engel RF, Granger CW, editors. Long run relationships: readings in cointegration. London: Oxford University Press; 1991.
 IMF, International Financial Statistics. IMF, Washington, D.C., 2009.
 TSI, Annual Statistics. Turkish Statistical Institute, Ankara, 2009.
 WB, World Development Indicators. World Bank, Washington, D.C., 2009.