Sectoral energy consumption and economic growth nexus in Turkey

Abstract

The paper examines the nexus between sectoral energy consumption and economic growth for Turkey with annual data over the period 1970-2007. In order to analyze the relationship between sectoral energy consumption and economic growth econometrically, the stationarity test, VAR model, co-integration test, Granger causality test, impulse-response functions and variance decompositions are used. Findings showed that energy consumption by sector and economic growth are cointegrated they have a long-term relationship. Moreover it was seen that energy consumption in agriculture and industry have a positive impact on economic growth but energy consumption in household:; and transportation have a negative impact on economic growth.