Disaggregated energy consumption and economic growth in G-7 countries

ABSTRACT

This study aims to examine the relationship between energy consumption (i.e., oil, natural gas, and coal) and economic growth in G-7 countries. For this purpose, the annual data from 1970 to 2013 is investigated using with panel bootstrap causality approach that allows cross-sectional dependency and heterogeneity among countries. The results reveal that the oil consumption causes economic growth in Germany, Italy, Japan, and the United States; economic growth causes oil consumption in Germany and the United Kingdom; natural gas consumption causes economic growth in Italy, Japan, the United States, and the United Kingdom; economic growth causes natural gas consumption in Germany; coal consumption causes economic growth in Canada; and economic growth causes coal consumption in the United States.

KEYWORDS:

• Bootstrap causality
• coal
• energy consumption
• G-7 countries
• oil
• natural gas