Relationship between energy and GNP

Journal Article · · J. Energy Dev.; (United States)

OSTI ID:6713220

Kraft, J ^[1]; Kraft, A

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1. National Science Foundation, Washington, DC

This note reports results of an empirical test for determining the causal relationship between energy and gross national product. According to a current view, there is a constant and unchanging relationship between gross energy consumption and GNP. A logical corollary is that energy conservation is an unacceptable policy option since it would adversely influence economic activity. This implies that the direction of causality runs from energy to GNP as well as the other way around. With regard to the issue of causation, Sims (J. Am. Statis. Assn., Mar 1972) developed a test for unidirectional causality, which he applied to test the existence of a causal relationship between money and GNP. In this note, the authors attempt to determine both the empirical relationship between gross energy inputs and GNP and the presence of a causal link between these variables. The main empirical finding is that causality is unidirectional, only running from GNP to energy for the postwar period, and there is no causality from energy to GNP.

• OSTI ID: 6713220
• Journal Information: J. Energy Dev.; (United States), Vol. 3:2
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
ENERGY CONSUMPTION
GROSS NATIONAL PRODUCT
CORRELATIONS
ECONOMIC IMPACT
ECONOMIC POLICY
ECONOMICS
ENERGY
ENERGY CONSERVATION
USA
NORTH AMERICA
290200* - Energy Planning & Policy- Economics & Sociology
298000 - Energy Planning & Policy- Consumption & Utilization