Environment, Development and Sustainability

, Volume 17, Issue 1, pp 137–153 | Cite as

Energy consumption and GDP in Italy: cointegration and causality analysis

Article

Abstract

The aim of this article was to assess the empirical evidence of the nexus between GDP and energy consumption for Italy during the period 1970–2009, using a time series approach. After a brief introduction, a survey of the economic literature on this issue is shown, before discussing the data and introducing some econometric techniques. Stationarity tests reveal that both series are nonstationary, or I(1). Moreover, a cointegration relationship is found between the two variables. The short-run dynamics of the variables show that the flow of causality runs from energy use to GDP, and there is a long-run bidirectional causal relationship (or feedback effect) between the two series. Consequently, we conclude that energy is a limiting factor to GDP growth in Italy and that energy conservation policy should be formulated and implemented wisely.

Keywords

Energy policies Energy consumption GDP Stationarity Cointegration Causality Italy 

JEL Classification

B22 C22 N54 Q43 

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© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Department of Political SciencesRoma Tre UniversityRomeItaly
  2. 2.Italian Economic Association (SIE)AnconaItaly
  3. 3.Royal Economic Society (RES)LondonUK

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