Revisiting the asymmetric causal link between energy consumption and output in China: Focus on coal and oil consumption

ABSTRACT

This paper reexamines the relationship between energy consumption and output growth in China over the period from 1969 to 2013, using an asymmetric Granger causality test proposed by Hatemi-J (2012). This article uses oil and coal as the major energy consumption variables because both coal consumption increased by more 2.3 billion over the past 10 years and oil consumption grew by 4.3% at the end of 2016. Empirical results indicate asymmetric Granger causal relationship did exist between energy consumption (for both oil and coal consumption) and output growth in China. The empirical results have important policy implications for the conduct of energy policy in China.

KEYWORDS:

• Asymmetric Granger causality test
• coal consumption
• oil consumption