Shahiduzzaman, Md and Alam, Khorshed (2012): A reassessment of energy and GDP relationship: A case of Australia.

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Abstract
This paper investigates the longrun and shortrun relationships between energy consumption and economic growth in Australia using the bound testing and the ARDL approach. For the first time in the literature we employ both production and demand side models and a unified model comprising both production and demand side variables for a single set of data. The relationships are investigated at aggregate as well as several disaggregated energy categories, such as coal, oil, gas and electricity. The possibilities of one or more structural break(s) in the data series are examined by applying the recent advances in techniques. We find that the results of the cointegration tests could be affected by the structural break(s) in the data. It is, therefore, crucial to incorporate the information on structural break(s) in the subsequent modelling and inferences. Moreover, neither the production side nor the demand side framework alone can provide sufficient information to draw an ultimate conclusion on the cointegration and causal direction between energy and output. When alternative frameworks and structural break(s) in timeseries are explored properly, strong evidence of a bidirectional relationship between energy and output can be observed. The finding is true both at aggregate and disaggregate levels of energy consumption.
Item Type:  MPRA Paper 

Original Title:  A reassessment of energy and GDP relationship: A case of Australia 
Language:  English 
Keywords:  Energy consumption; Economic growth; Cointegration; Causality 
Subjects:  O  Economic Development, Innovation, Technological Change, and Growth > O5  Economywide Country Studies > O56  Oceania O  Economic Development, Innovation, Technological Change, and Growth > O1  Economic Development > O13  Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products Q  Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4  Energy > Q43  Energy and the Macroeconomy 
Item ID:  36256 
Depositing User:  Md Shahiduzzaman 
Date Deposited:  28. Jan 2012 16:18 
Last Modified:  12. Feb 2013 14:31 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/36256 