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Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK

Year 2013, Volume: 3 Issue: 4, 384 - 394, 01.12.2013

Abstract

This paper empirically examines the relation between energy consumption volatility and unpredictable variations in real gross domestic product (GDP) in the UK. Estimating the Markov switching ARCH model we find a significant regime switching in the behavior of both energy consumption and GDP volatility. The results from the Markov regime-switching model show that the variability of energy consumption has a significant role to play in determining the behavior of GDP volatilities. Moreover, the results suggest that the impacts of unpredictable variations in energy consumption on GDP volatility are asymmetric, depending on the intensity of volatility. In particular, we find that while there is no significant contemporaneous relationship between energy consumption volatility and GDP volatility in the first (low-volatility) regime, GDP volatility is significantly positively related to the volatility of energy utilization in the second (high-volatility) regime.

Year 2013, Volume: 3 Issue: 4, 384 - 394, 01.12.2013

Abstract

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Details

Other ID JA24HR48DS
Journal Section Research Article
Authors

Abdul Rashid This is me

Ozge Kandemir Kocaaslan This is me

Publication Date December 1, 2013
Published in Issue Year 2013 Volume: 3 Issue: 4

Cite

APA Rashid, A., & Kocaaslan, O. K. (2013). Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK. International Journal of Energy Economics and Policy, 3(4), 384-394.
AMA Rashid A, Kocaaslan OK. Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK. IJEEP. December 2013;3(4):384-394.
Chicago Rashid, Abdul, and Ozge Kandemir Kocaaslan. “Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK”. International Journal of Energy Economics and Policy 3, no. 4 (December 2013): 384-94.
EndNote Rashid A, Kocaaslan OK (December 1, 2013) Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK. International Journal of Energy Economics and Policy 3 4 384–394.
IEEE A. Rashid and O. K. Kocaaslan, “Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK”, IJEEP, vol. 3, no. 4, pp. 384–394, 2013.
ISNAD Rashid, Abdul - Kocaaslan, Ozge Kandemir. “Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK”. International Journal of Energy Economics and Policy 3/4 (December 2013), 384-394.
JAMA Rashid A, Kocaaslan OK. Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK. IJEEP. 2013;3:384–394.
MLA Rashid, Abdul and Ozge Kandemir Kocaaslan. “Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK”. International Journal of Energy Economics and Policy, vol. 3, no. 4, 2013, pp. 384-9.
Vancouver Rashid A, Kocaaslan OK. Does Energy Consumption Volatility Affect Real GDP Volatility? An Empirical Analysis for the UK. IJEEP. 2013;3(4):384-9.