Analysis of the Relationship Between Energy Consumption and Economic Growth in Transition Countries

ABSTRACT

This paper investigates the relationship between economic growth and energy consumption in European transition countries. Cross-sectionally augmented autoregressive distributed lag and cross-sectionally augmented distributed lag models were used in the paper to investigate the relationship, while robustness was checked using several different estimators. The results confirm a positive relationship between the variables. Growth of the gross domestic product will lead to an increase in energy consumption in the long run, so transition countries should work on creating new sources of energy and improving energy efficiency. Policies based on limiting energy consumption can have a negative impact on economic growth.

KEYWORDS:

• CS-ARDL
• CS-DL
• economic growth
• energy consumption
• transition countries

JEL CLASSIFICATION:

• E10
• O11
• O40
• P20
• Q43

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Bojan Pejovic

Bojan Pejovic, Teaching Associate at the Faculty of Economics, University of Montenegro. His research interests include: energy economics, econometrics and macroeconomics. University of Montenegro, Faculty of Economics; PhD (University of Belgrade)

Tamara Backovic

Tamara Backovic, Associate Professor at the Faculty of Economics, University of Montenegro. Her research interests include: econometrics, statistics and operational research.

Vesna Karadzic

Vesna Karadzic, PhD, full professor at the Faculty of Economics, University of Montenegro. Her research interests include: macroeconomics, econometrics and quantitative economics.