Energy consumption and GDP in Turkey: is there a co-integration relationship?

Energy consumption and GDP are expected to grow by 5.9% and 7% annually until 2025 in Turkey. This paper tries to unfold the linkage between energy consumption and GDP by undertaking a co-integration analysis for Turkey with annual data over the period 1970-2003. The analysis shows that energy consumption and GDP are co-integrated. This means that there is a (possibly bi-directional) causality relationship between the two. We establish that there is a unidirectional causality running from GDP to energy consumption indicating that energy saving would not harm economic growth in Turkey. In addition, we find that energy consumption keeps on growing as long as the economy grows in Turkey.

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