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How Linked are Energy and GDP: Reconsidering Energy-GDP Cointegration and Causality for Disaggregated OECD Country Data.

Liddle, Brantley (2006): How Linked are Energy and GDP: Reconsidering Energy-GDP Cointegration and Causality for Disaggregated OECD Country Data. Published in: International Journal of Energy, Environment and Economics , Vol. 13, No. 2 (2006): pp. 97-113.

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Abstract

This study is different from previous energy-GDP cointegration/causality ones by examining whether total energy consumption by industry causes total industry GDP (or vice versa), and whether per capita GDP causes per capita road and residential sector energy use (or vice versa) for a number of OECD countries. The primary findings are that nearly all of the data series analyzed are not cointegrated, and that by far the most robust result is that of Granger-noncausality; thus, developed economies may be far more flexible in their relation with energy than is often understood, and the price mechanism may be a none-too-costly policy instrument to lower energy consumption.

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