The causal relationship between electricity consumption and GDP in Turkey: Evidence from ARDL bounds testing approach

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ACARAVCI A.

Ekonomska Istrazivanja, vol.23, no.2, pp.34-43, 2010 (SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 23 Issue: 2
  • Publication Date: 2010
  • Doi Number: 10.1080/1331677x.2010.11517410
  • Journal Name: Ekonomska Istrazivanja
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.34-43
  • Keywords: ARDL bounds testing, Economic growth, Electricity consumption
  • Hatay Mustafa Kemal University Affiliated: Yes

Abstract

This paper investigates the long-run and causal relationship between electricity consumption and economic growth in Turkey by using the ARDL cointegration test and Granger causality models. It employs annual data covering the period of 1977-2006. The ARDL cointegration test yields evidence of a long-run relationship between electricity consumption per capita and real GDP per capita. The results from the Granger causality models indicate that there is an evidence of unidirectional causality running from the electricity consumption to economic growth in the long-run. The overall results confirm the "Growth hypothesis" for Turkey. This implies that, energy conservation policies, such as rationing electricity consumption, are likely to have an adverse effect on real GDP of Turkey.