The Causality Link Between Electricity Consumption and Economic Growth in Turkey: Evidence from ARDL Bounds Testing Procedure


PATA U. K. , TERZİ H.

BUSINESS AND ECONOMICS RESEARCH JOURNAL, vol.8, no.1, pp.1-19, 2017 (Other Refereed National Journals)

  • Publication Type: Article / Article
  • Volume: 8 Issue: 1
  • Publication Date: 2017
  • Title of Journal : BUSINESS AND ECONOMICS RESEARCH JOURNAL
  • Page Numbers: pp.1-19

Abstract

Electricity consumption is regarded as an indicator of welfare in both developing and developed countries. In this study, the causality link between net electricity consumption and economic growth in the Turkish economy is investigated by the 55 annual observations covering the period from 1960 to 2014. According to the results of UVAR and ARDL analysis resolved with both AIC and SIC information criteria, there is a positive unidirectional and statistically significant causality moving from net electricity consumption to economic growth in the short/long run. The empirical results indicate that the energy led-growth hypothesis is valid for Turkey, that is growing net electricity consumption positively stimulates the economic growth in the short/long run.