Theoretical relation between the Energy Consumption and Economic growth in context of Turkey

Abstract

The main objective of the study is to investigate the theoretical relationship of the energy consumption and economic growth in the context of Turkey. The Results indicate that EC and TO are co-integrated in the long run. While other variables Gross Domestic Product (GDP) Energy Consumption(EC), GDP Domestic Investment(DI), GDP Trade Openness(TO), GDP Inflation (INF), GDP Labor Force (LF), EC DI, EC INF, EC LF, DI TO, DI INF, DI LF, TO INF, TO LF and INF LF are not co-integrated in the long run. In the previous studies the results of thePairwise Granger Causality Test showTO does Granger Cause GDP. There is a unidirectional relationship between the TO and GDP. INF does Granger Cause GDP and INF has positive impact on GDP. Unidirectional relationship exists between the INF and GDP.GDP does Granger Cause LF, when GDP increased it became the cause to increase in the LF. It also has unidirectional association. TO does Granger Cause EC and EC does Granger Cause TO. Bidirectional relationship exists between TO and EC in the economy of the country. LF does Granger Cause EC. This result shows the unidirectional relationship between the LF and EC. Similarly, INF does Granger Cause DI and INF has positive impact on the DI of the country, also show the unidirectional relationship between the INF and DI. Moreover, DI does Granger Cause LF and DI has positive impact on the LF in the Turkey, also present the unidirectional existence.