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The Relationship of Energy Consumption and Economic Growth under Structural Break: An Application on Türkiye

Year 2025, Volume: 12 Issue: 1, 171 - 189, 30.06.2025
https://doi.org/10.47097/piar.1696046

Abstract

It is known that oil crises caused great economic distress in the world after the 1970s. These crises were caused by problems related to energy supply and created a more debatable environment for the relationship between economy and energy. During this period, discussions on the concepts of energy and economic growth increased among economists. This study aims to contribute to the discussions in the EC (energy consumption) and EG (economic growth) literature from the perspective of biophysical theory. In this study, the effect of EC on EG and the effect of EG on EC for the period 1970-2019 in Türkiye were examined using Zivot-Andrews unit root, Gregory-Hansen cointegration, DOLS, FMOLS, CCR and Granger causality analysis methods. With these methods, the complex structure of long-term relationships and causality relationships were examined in depth by taking into account structural breaks in Türkiye. The findings revealed that there was a cointegration relationship between EC and EG. The structural break year was found to be 2010 and it was seen that the effects of the global economic crisis continued. When the long-term coefficients are examined, a 1% increase in EC increases EG by 0.37%, 0.72% and 0.69%, respectively, according to DOLS, FMOLS and CCR estimators. In addition, EC is the Granger cause of EG. It was seen that the growth hypothesis is valid in Türkiye. The establishment of policies that support the increase in energy investments in Türkiye has the potential to contribute to a stable economic growth.

References

  • Alam, M. S. (2006). Economic growth with energy. Munich Personal RePEc Archive 2006; Working Paper, 1260, 1-25.
  • Ang, J. B. (2007). CO2 emissions, energy consumption, and output in France. Energy Policy, 35(10), 4772-4778.
  • Ayres, R., & Bergh, J. C. (2005). A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms. Ecological Economics, 55(1), 96-118.
  • Bowden, N., & Payne, J. E. (2009). The causal relationship between US energy consumption and real output: a disaggregated analysis. Journal of Policy Modeling, 31(2), 180-188.
  • Cheng, B. S. & Andrews, D. R. (1998). Energy and economic activity in the United States: Evidence from 1900 to 1945. Energy Sources, 20(1), 35-44.
  • Cheng, B. S. (1995). An investigation of cointegration and causality between energy consumption and economic growth. The Journal of Energy and Development, 21(1), 73-84.
  • Ciarreta, A., & Zárraga, A. (2009). Electricity consumption and economic growth: Evidence from Spain. Applied Economics Letters, 17(14), 1417-1421.
  • Dam, M. M., & Sarkodie, S. A. (2023). Renewable energy consumption, real income, trade openness, and inverted load capacity factor nexus in Turkiye: Revisiting the EKC hypothesis with environmental sustainability. Sustainable Horizons, 8, 100063.
  • Farahani Yazdan, G., & Hossein, S. S. M. (2012). Causality between oil consumption and economic growth in Iran: An ARDL testing approach. Asian Economic and Financial Review, 2(6), 678.
  • Ghosh, S. (2002). Electricity consumption and economic growth in India. Energy policy, 30(2), 125-129.
  • Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424-438.
  • Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of Econometrics, 70(1), 99-126.
  • Gupta, G., & Sahu, N. C. (2009). Causality between electricity consumption & economic growth: Empirical evidence from India. Munich Personal RePEc Archive 2009 Working Paper, 22942.
  • Gurgul, H., & Lach, Ł. (2012). The electricity consumption versus economic growth of the Polish economy. Energy Economics, 34(2), 500-510.
  • Güneş, İ. ve Erol, E. D. (2024). Türkiye’de enerji ithalatı, ekonomik büyüme ve cari açık ilişkisi. The Journal of Academic Social Science, 45(45), 340-352.
  • Hall, C. A., & Klitgaard, K. A. (2006). The need for a new biophysical-based paradigm in economics for the second half of the age of oil. International Journal of Transdisciplinary Research, 1.
  • Han, A. (2022). E7 ülkelerinde yenilenebilir enerji tüketimi ve ekonomik büyüme ilişkisinin incelenmesi. Uluslararası Yönetim İktisat ve İşletme Dergisi, 18(3), 797-814.
  • Hansen, B. E., & P. C. B. Phillips (1990). Estimation and inference in models of cointegration: A Simulation Study. Advances in Econometrics, 8, 225-248.
  • Ho, C. Y., & Siu, K. W. (2007). A dynamic equilibrium of electricity consumption and GDP in Hong Kong: an empirical investigation. Energy Policy, 35(4), 2507-2513.
  • Hussen, A. M. (2004). Princibles of environmental economics. Newyork, London: Routledge, 251.
  • Ikegami, M., & Wang, Z. (2016). The long-run causal relationship between electricity consumption and real GDP: Evidence from Japan and Germany. Journal of Policy Modeling, 38(5), 767-784.
  • Kennedy, C. (2022). The intersection of biophysical economics and political economy. Ecological Economics, 192, 107272.
  • Kraft A., & Kraft J. (1978). On the relationship between energy and GNP. The Journal of Energy and Development, 3(2), 401–403.
  • Kyophilavong, P., Shahbaz, M., Anwar, S., & Masood, S. (2015). The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?. Renewable and Sustainable Energy Reviews, 46, 265-274.
  • Lise, W., & Van Montfort, K. (2007). Energy consumption and GDP in Türkiye: Is there a co‐integration relationship?. Energy Economics, 29(6), 1166-1178.
  • Lu, W. C. (2017). Electricity Consumption and economic growth: evidence from 17 Taiwanese industries. Sustainability, 9(1), 50.
  • Mehmood, B., Feliceo, A., & Shahid, A. (2014). What causes what? aviation demand and economic growth in Romania: Cointegration estimation and causality analysis. Romanian Economic and Business Review, 9(1), 21-34.
  • Narayan, P. K., & Smyth, R. (2005). Electricity consumption, employment and real ıncome in australia evidence from multivariate granger causality tests. Energy Policy, 33(9), 1109-1116.
  • Ockwell, D. G. (2008). Energy and economic growth: Grounding our understanding in physical reality. Energy Policy, (36), 4601.
  • Örnek, İ. ve Kabak, S. (2023). Yenilenebilir enerji tüketimi ve ekonomik büyüme arasındaki ilişki: Türkiye üzerine bir inceleme. Artuklu Kaime Uluslararası İktisadi ve İdari Araştırmalar Dergisi, 6(2), 87-108.
  • Park, S. Y., & Yoo, S. H. (2014). The dynamics of oil consumption and economic growth İn Malaysia. Energy Policy, 66, 218-223.
  • Park, J. Y. (1992). Canonical cointegrating regressions. Econometrica, 60(1), 119-143.
  • Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica, 57(6), 1361-1401.
  • Roegen, N. G. (1976). Energy and economic myths: Institutional and analytical economic essays. Pergamon Press.
  • Salahuddin, M., & Alam, K. (2015). Internet usage, electricity consumption and economic growth in Australia: A time series evidence. Telematics and Informatics, 32(4), 862-878.
  • Shiu, A., and Lam, P.-L. (2004). Electricity consumption and economic growth in China. Energy Policy, 32(1), 47-54.
  • Stern, D. I. (1993). Energy and economic growth in the USA. Energy Economics, 15(2), 137–150.
  • Stern, D. I. (2000). A multivariate cointegration analysis of the role of energy in the us macroeconomy. Energy Economics, 22(2), 267-283.
  • Stern, D. I. (2010). The Rol of Energy in Economic Growth. The Australian National University, CCEP Working paper, 3(10), 9.
  • Stock, J. H., & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica, 61(4), 783-820.
  • Tang, C. F., Shahbaz, M., & Arouri, M. (2013). Re-Investigating the electricity consumption and economic growth nexus in Portugal. Energy Policy, 62, 1515-1524.
  • Tartari, P. N. (2023). The BRICS and the global political economy: Challenging classical economic approaches and insights fort the furture. Brazilian Journal of Law & International Relations, 4(42), 277-290.
  • Tosunoğlu, M., & Uçal, H. (2025). The relationship between energy consumption and economic growth: cointegration and causality approaches. Pamukkale Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, (67), 177-193.
  • Tsani, S. Z. (2010). Energy consumption and economic growth: A causality analysis for Greece. Energy Economics, 32(3), 582-590.
  • Vecchione, G. (2011). Economic growth, electricity consumption and foreign dependence in Italy between 1963–2007. Energy Sources, Part B: Economics, Planning, and Policy, 6(3), 304-313.
  • Yang, H. Y. (2000). A note on the causal relationship between energy and GDP in Taiwan. Energy Economics, 22(3), 309-317.
  • Yoo, S.-H. (2005). Electricity consumption and economic growth: evidence from Korea. Energy Policy, 33(12), 1627-1632.
  • Yu, E. S. H., & Jin, J. C. (1992). Cointegration consumption, tests of energy income, and employment. Resources and Energy, 14(3), 259-266.
  • Zivot, E., & Andrews, D. W. K. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 10(3), 251–270.
  • Zou, G., & Chau, K. W. (2006). Short-and Long-Run Effects between Oil Consumption and Economic Growth in China. Energy Policy, 34(18), 3644-3655.
  • World Development Indicators (2020, May 20). Popular Indicators. https://databank.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/1ff4a498/Popular-Indicators
  • World Energy Council Turkiye (2021, January 22). Türkiye Enerji Denge Tabloları. https://www.dunyaenerji.org.tr/turkiye-enerji-denge-tablolari/.

Yapısal Kırılma Altında Enerji Tüketimi ve Ekonomik Büyüme İlişkisi: Türkiye Üzerine Bir Uygulama

Year 2025, Volume: 12 Issue: 1, 171 - 189, 30.06.2025
https://doi.org/10.47097/piar.1696046

Abstract

Petrol krizlerinin 1970'li yıllardan sonra Dünya'yı büyük bir ekonomik sıkıntıya soktuğu bilinmektedir. Bu krizler, enerji arzıyla ilgili sorunlardan kaynaklanmış olup, ekonomi ve enerji arasındaki ilişkiyi daha fazla tartışma ortamı oluşturmuştur. Bu dönemde, ekonomistler arasında enerji ve ekonomik büyüme kavramları üzerine yapılan tartışmalar artmıştır. Bu çalışma, EC (enerji tüketimi) ve EG (ekonomik büyüme) literatüründeki tartışmalara, biyofiziksel teorinin bakış açısından katkıda bulunmayı amaçlamaktadır. Bu çalışmada, Türkiye’de 1970-2019 dönemi için EC’nin EG üzerindeki etkisi ve EG’nin EC üzerindeki etkisini Zivot-Andrews birimkök, Gregory-Hansen eş-bütünleşme, DOLS, FMOLS, CCR ve Granger nedensellik analizi yöntemleriyle incelenmiştir. Bu yöntemlerle Türkiye’de yapısal kırılmalar dikkate alınarak uzun dönem ilişkiler ve nedensellik ilişkilerinin karmaşık yapısı derinlemesine incelenmiştir. Bulgular, EC ile EG arasında eş-bütünleşme ilişkisi tespit edilmiştir. Yapılsal kırılma yılı 2010 bulunarak küresel ekonomik krizin etkilerinin devam ettiği görülmüştür. Uzun dönem dönem katsayılarına bakıldığında EC’de yaşanacak %1’lik bir artış DOLS, FMOLS ve CCR tahmincilerine göre sırasıyla %0.37, %0.72 ve %0.69 EG’yi arttırmaktadır. Ayrıca, EC'nin EG'nin Granger nedenidir. Türkiye’de büyüme hipotezinin geçerli olduğu görülmüştür. Türkiye'de enerji yatırımlarının artmasını destekleyen politikaların oluşturulması, istikrarlı bir ekonomik büyümeye katkı sağlama potansiyeline sahiptir.

References

  • Alam, M. S. (2006). Economic growth with energy. Munich Personal RePEc Archive 2006; Working Paper, 1260, 1-25.
  • Ang, J. B. (2007). CO2 emissions, energy consumption, and output in France. Energy Policy, 35(10), 4772-4778.
  • Ayres, R., & Bergh, J. C. (2005). A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms. Ecological Economics, 55(1), 96-118.
  • Bowden, N., & Payne, J. E. (2009). The causal relationship between US energy consumption and real output: a disaggregated analysis. Journal of Policy Modeling, 31(2), 180-188.
  • Cheng, B. S. & Andrews, D. R. (1998). Energy and economic activity in the United States: Evidence from 1900 to 1945. Energy Sources, 20(1), 35-44.
  • Cheng, B. S. (1995). An investigation of cointegration and causality between energy consumption and economic growth. The Journal of Energy and Development, 21(1), 73-84.
  • Ciarreta, A., & Zárraga, A. (2009). Electricity consumption and economic growth: Evidence from Spain. Applied Economics Letters, 17(14), 1417-1421.
  • Dam, M. M., & Sarkodie, S. A. (2023). Renewable energy consumption, real income, trade openness, and inverted load capacity factor nexus in Turkiye: Revisiting the EKC hypothesis with environmental sustainability. Sustainable Horizons, 8, 100063.
  • Farahani Yazdan, G., & Hossein, S. S. M. (2012). Causality between oil consumption and economic growth in Iran: An ARDL testing approach. Asian Economic and Financial Review, 2(6), 678.
  • Ghosh, S. (2002). Electricity consumption and economic growth in India. Energy policy, 30(2), 125-129.
  • Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica, 37(3), 424-438.
  • Gregory, A. W., & Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of Econometrics, 70(1), 99-126.
  • Gupta, G., & Sahu, N. C. (2009). Causality between electricity consumption & economic growth: Empirical evidence from India. Munich Personal RePEc Archive 2009 Working Paper, 22942.
  • Gurgul, H., & Lach, Ł. (2012). The electricity consumption versus economic growth of the Polish economy. Energy Economics, 34(2), 500-510.
  • Güneş, İ. ve Erol, E. D. (2024). Türkiye’de enerji ithalatı, ekonomik büyüme ve cari açık ilişkisi. The Journal of Academic Social Science, 45(45), 340-352.
  • Hall, C. A., & Klitgaard, K. A. (2006). The need for a new biophysical-based paradigm in economics for the second half of the age of oil. International Journal of Transdisciplinary Research, 1.
  • Han, A. (2022). E7 ülkelerinde yenilenebilir enerji tüketimi ve ekonomik büyüme ilişkisinin incelenmesi. Uluslararası Yönetim İktisat ve İşletme Dergisi, 18(3), 797-814.
  • Hansen, B. E., & P. C. B. Phillips (1990). Estimation and inference in models of cointegration: A Simulation Study. Advances in Econometrics, 8, 225-248.
  • Ho, C. Y., & Siu, K. W. (2007). A dynamic equilibrium of electricity consumption and GDP in Hong Kong: an empirical investigation. Energy Policy, 35(4), 2507-2513.
  • Hussen, A. M. (2004). Princibles of environmental economics. Newyork, London: Routledge, 251.
  • Ikegami, M., & Wang, Z. (2016). The long-run causal relationship between electricity consumption and real GDP: Evidence from Japan and Germany. Journal of Policy Modeling, 38(5), 767-784.
  • Kennedy, C. (2022). The intersection of biophysical economics and political economy. Ecological Economics, 192, 107272.
  • Kraft A., & Kraft J. (1978). On the relationship between energy and GNP. The Journal of Energy and Development, 3(2), 401–403.
  • Kyophilavong, P., Shahbaz, M., Anwar, S., & Masood, S. (2015). The energy-growth nexus in Thailand: Does trade openness boost up energy consumption?. Renewable and Sustainable Energy Reviews, 46, 265-274.
  • Lise, W., & Van Montfort, K. (2007). Energy consumption and GDP in Türkiye: Is there a co‐integration relationship?. Energy Economics, 29(6), 1166-1178.
  • Lu, W. C. (2017). Electricity Consumption and economic growth: evidence from 17 Taiwanese industries. Sustainability, 9(1), 50.
  • Mehmood, B., Feliceo, A., & Shahid, A. (2014). What causes what? aviation demand and economic growth in Romania: Cointegration estimation and causality analysis. Romanian Economic and Business Review, 9(1), 21-34.
  • Narayan, P. K., & Smyth, R. (2005). Electricity consumption, employment and real ıncome in australia evidence from multivariate granger causality tests. Energy Policy, 33(9), 1109-1116.
  • Ockwell, D. G. (2008). Energy and economic growth: Grounding our understanding in physical reality. Energy Policy, (36), 4601.
  • Örnek, İ. ve Kabak, S. (2023). Yenilenebilir enerji tüketimi ve ekonomik büyüme arasındaki ilişki: Türkiye üzerine bir inceleme. Artuklu Kaime Uluslararası İktisadi ve İdari Araştırmalar Dergisi, 6(2), 87-108.
  • Park, S. Y., & Yoo, S. H. (2014). The dynamics of oil consumption and economic growth İn Malaysia. Energy Policy, 66, 218-223.
  • Park, J. Y. (1992). Canonical cointegrating regressions. Econometrica, 60(1), 119-143.
  • Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica, 57(6), 1361-1401.
  • Roegen, N. G. (1976). Energy and economic myths: Institutional and analytical economic essays. Pergamon Press.
  • Salahuddin, M., & Alam, K. (2015). Internet usage, electricity consumption and economic growth in Australia: A time series evidence. Telematics and Informatics, 32(4), 862-878.
  • Shiu, A., and Lam, P.-L. (2004). Electricity consumption and economic growth in China. Energy Policy, 32(1), 47-54.
  • Stern, D. I. (1993). Energy and economic growth in the USA. Energy Economics, 15(2), 137–150.
  • Stern, D. I. (2000). A multivariate cointegration analysis of the role of energy in the us macroeconomy. Energy Economics, 22(2), 267-283.
  • Stern, D. I. (2010). The Rol of Energy in Economic Growth. The Australian National University, CCEP Working paper, 3(10), 9.
  • Stock, J. H., & Watson, M. W. (1993). A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica, 61(4), 783-820.
  • Tang, C. F., Shahbaz, M., & Arouri, M. (2013). Re-Investigating the electricity consumption and economic growth nexus in Portugal. Energy Policy, 62, 1515-1524.
  • Tartari, P. N. (2023). The BRICS and the global political economy: Challenging classical economic approaches and insights fort the furture. Brazilian Journal of Law & International Relations, 4(42), 277-290.
  • Tosunoğlu, M., & Uçal, H. (2025). The relationship between energy consumption and economic growth: cointegration and causality approaches. Pamukkale Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, (67), 177-193.
  • Tsani, S. Z. (2010). Energy consumption and economic growth: A causality analysis for Greece. Energy Economics, 32(3), 582-590.
  • Vecchione, G. (2011). Economic growth, electricity consumption and foreign dependence in Italy between 1963–2007. Energy Sources, Part B: Economics, Planning, and Policy, 6(3), 304-313.
  • Yang, H. Y. (2000). A note on the causal relationship between energy and GDP in Taiwan. Energy Economics, 22(3), 309-317.
  • Yoo, S.-H. (2005). Electricity consumption and economic growth: evidence from Korea. Energy Policy, 33(12), 1627-1632.
  • Yu, E. S. H., & Jin, J. C. (1992). Cointegration consumption, tests of energy income, and employment. Resources and Energy, 14(3), 259-266.
  • Zivot, E., & Andrews, D. W. K. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 10(3), 251–270.
  • Zou, G., & Chau, K. W. (2006). Short-and Long-Run Effects between Oil Consumption and Economic Growth in China. Energy Policy, 34(18), 3644-3655.
  • World Development Indicators (2020, May 20). Popular Indicators. https://databank.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG/1ff4a498/Popular-Indicators
  • World Energy Council Turkiye (2021, January 22). Türkiye Enerji Denge Tabloları. https://www.dunyaenerji.org.tr/turkiye-enerji-denge-tablolari/.
There are 52 citations in total.

Details

Primary Language English
Subjects Macroeconomics (Other)
Journal Section Research Articles
Authors

Mahir Tosunoğlu 0000-0002-9941-0151

Halil Uçal 0000-0002-1475-2962

Early Pub Date June 30, 2025
Publication Date June 30, 2025
Submission Date May 9, 2025
Acceptance Date June 3, 2025
Published in Issue Year 2025 Volume: 12 Issue: 1

Cite

APA Tosunoğlu, M., & Uçal, H. (2025). The Relationship of Energy Consumption and Economic Growth under Structural Break: An Application on Türkiye. Pamukkale Üniversitesi İşletme Araştırmaları Dergisi, 12(1), 171-189. https://doi.org/10.47097/piar.1696046

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