Renewable energy, nonrenewable energy consumption, and economic growth

ABSTRACT

This study examines the relationship between economic growth, renewable energy consumption, energy consumption, financial development, and trade openness over the period 1979–2014 in case of Iran, using Autoregressive Lag (Distributed ARDL) approach and Granger causality test. The renewable energy consumption has a negative impact on economic growth in the short run and the long run.

We find the unidirectional causality from renewable energy consumption to economic growths apply to determine the causality between variables. This finding implies that economic growth is favorable for the development of the renewable energy sector, which in turn helps boost economic growth in Iran.

KEYWORDS:

• ARDL
• Economic growth
• financial development
• Iran
• non renewable energy
• renewable energy

Acknowledgment

This paper is extracted from “The Economic Effect of Renewable Energy Development in Iran.” The project was supported by the College of Economics & Accounting, Islamic Azad University, South Tehran Branch. We are thankful to our colleagues who provided expertise that greatly assisted the research.