Universität zu Köln

Berk, Istemi ORCID: 0000-0003-3507-2293 and Yetkiner, Hakan ORCID: 0000-0002-4455-8757 (2014). Energy prices and economic growth in the long run: Theory and evidence. Renew. Sust. Energ. Rev., 36. S. 228 - 236. OXFORD: PERGAMON-ELSEVIER SCIENCE LTD. ISSN 1879-0690

Full text not available from this repository.

Abstract

In this paper, we attempt to derive and test the role of energy prices on economic growth. We first developed a two-sector endogenous growth model, based on J Polit Economy 1991; 99:500-521. We modified the model such that consumption goods sector uses energy as an input along with capital. The model allows us to show that the growth rate of energy price has a negative effect on the growth rates of energy use and real GDP. Following this, derived theoretical relationships between energy prices and economic growth and energy consumption were tested empirically using error-correction based panel cointegration tests and panel Autoregressive Distributed Lag (ARDL) approach. We applied this methodology on data of composite energy prices, GDP per capita and energy consumption per capita for sixteen countries for the period between 1978 and 2011. We found significant cointegration between energy prices and real GDP per capita, as well as between energy prices and energy consumption per capita. Moreover, long-run estimates reveal negative and significant effects of composite energy prices on both GDP per capita and energy consumption per capita. We suggest that increasing the share of renewable energy sources in energy consumption would help policy-makers to control permanent long-term increases in consumer energy prices, in turn leading to an increase in economic growth, and hence in welfare. This paper contributes to the literature by highlighting the existence of a previously neglected welfare-improving channel of renewable energy. (C) 2014 Elsevier Ltd. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Berk, Istemi UNSPECIFIED orcid.org/0000-0003-3507-2293 UNSPECIFIED Yetkiner, Hakan UNSPECIFIED orcid.org/0000-0002-4455-8757 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-433472
DOI:	10.1016/j.rser.2014.04.051
Journal or Publication Title:	Renew. Sust. Energ. Rev.
Volume:	36
Page Range:	S. 228 - 236
Date:	2014
Publisher:	PERGAMON-ELSEVIER SCIENCE LTD
Place of Publication:	OXFORD
ISSN:	1879-0690
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language RENEWABLE ENERGY; CO2 EMISSIONS; COINTEGRATION TESTS; ERROR-CORRECTION; SUPPLY SHOCKS; OIL PRICES; US ECONOMY; CONSUMPTION; MACROECONOMY; RESOURCES Multiple languages Green & Sustainable Science & Technology; Energy & Fuels Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/43347