Electricity supply shocks and economic growth across the US states: evidence from a time-varying Bayesian panel VAR model, aggregate and disaggregate energy sources

Apergis, Nicholas and Polemis, Michael (2018): Electricity supply shocks and economic growth across the US states: evidence from a time-varying Bayesian panel VAR model, aggregate and disaggregate energy sources.

Abstract

This paper investigates spillovers between electricity supply shocks and US growth, using monthly data from 48 US States, spanning the period January 2001-September 2016, while employs a novel strategy for electricity supply shocks based on a time-varying Bayesian panel VAR model. It accounts for the decomposition of electricity supply per fuel mixture and links its possible interactions with the US macroeconomic conditions. In that sense, the methodology models the coefficients as a stochastic function of multiple structural characteristics. The findings document that GDP growth increases after a positive electricity supply shock, irrelevant to the source of energy that generates it.

• Item Type: MPRA Paper
• Language: English
• Keywords: Time-varying coefficient Bayesian panel VAR; electricity shocks; macroeconomic performance; impulse responses functions; US states.
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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