Frontiers in Energy

, Volume 8, Issue 1, pp 31–40

Electricity demand, GDP and employment: evidence from Italy

Research Article

DOI: 10.1007/s11708-014-0296-8

Cite this article as:
Magazzino, C. Front. Energy (2014) 8: 31. doi:10.1007/s11708-014-0296-8

Abstract

This paper applies time series methodologies to examine the causal relationship among electricity demand, real per capita GDP and total labor force for Italy from 1970 to 2009. After a brief introduction, a survey of the economic literature on this issue is reported, before discussing the data and introducing the econometric techniques used. The results of estimation indicate that one cointegrating relationship exists among these variables. This equilibrium relation implies that, in the long-run, GDP and labor force are correlated negatively, as well as GDP and electricity. Moreover, there is a bi-directional Granger causality flow between real per capita GDP and electricity demand; while labor force does not Grangercause neither real per capita GDP nor electricity demand. This implies that electricity demand and economic growth are jointly determined at the same time for the Italian case. The forecast error variance decomposition shows that forecast errors in real per capita GDP are mainly caused by the uncertainty in GDP itself, while forecast errors in labor force are mainly resulted from the labor force itself, although aggregate income and electricity are important, too.

Keywords

energy policies electricity demand GDP labor force stationarity structural breaks cointegration causality Italy 

Copyright information

© Higher Education Press and Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.Department of Political SciencesRoma Tre UniversityRomeItaly

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