Journal
APPLIED ENERGY
Volume 142, Issue -, Pages 44-55Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.apenergy.2014.12.036
Keywords
Energy consumption; Economic growth; Panel Granger causality; Heterogeneous panels; Developed and developing countries; Cross-sectional dependence
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This paper disaggregates energy consumption and GDP data according to end-use to analyze a broad number of developed and developing countries grouped in panels by similar characteristics. Panel long-run causality is assessed with a relatively under-utilized approach recommend by Canning and Pedroni (2008) [1]. We examine (i) reduced form production function models for both the industry and service/commercial sectors, where aggregate energy consumption is expected to cause aggregate output; and (ii) reduced form demand models, where income is expected to cause (separately) per capita residential electricity consumption and per capita gasoline consumption. We uncover for 12 different panels a set of super-consistent causality findings across two demand models that income Granger-causes per capita consumption. By contrast, the results from the production function models suggest that a different modeling framework is required to glean new, useful insights. (C) 2014 Elsevier Ltd. All rights reserved.
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