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Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis

The energy-growth nexus has important policy implications for economic development. The results from many past studies that investigated the causality direction of this nexus can lead to misleading policy guidance. Using data on China from 1953 to 2013, this study shows that an application of causal...

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Detalles Bibliográficos
Autores principales: Ha, Junsheng, Tan, Pei-Pei, Goh, Kim-Leng
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2018
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5962055/
https://www.ncbi.nlm.nih.gov/pubmed/29782534
http://dx.doi.org/10.1371/journal.pone.0197785
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author Ha, Junsheng
Tan, Pei-Pei
Goh, Kim-Leng
author_facet Ha, Junsheng
Tan, Pei-Pei
Goh, Kim-Leng
author_sort Ha, Junsheng
collection PubMed
description The energy-growth nexus has important policy implications for economic development. The results from many past studies that investigated the causality direction of this nexus can lead to misleading policy guidance. Using data on China from 1953 to 2013, this study shows that an application of causality test on the time series of energy consumption and national output has masked a lot of information. The Toda-Yamamoto test with bootstrapped critical values and the newly proposed non-linear causality test reveal no causal relationship. However, a further application of these tests using series in different time-frequency domain obtained from wavelet decomposition indicates that while energy consumption Granger causes economic growth in the short run, the reverse is true in the medium term. A bidirectional causal relationship is found for the long run. This approach has proven to be superior in unveiling information on the energy-growth nexus that are useful for policy planning over different time horizons.
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spelling pubmed-59620552018-06-02 Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis Ha, Junsheng Tan, Pei-Pei Goh, Kim-Leng PLoS One Research Article The energy-growth nexus has important policy implications for economic development. The results from many past studies that investigated the causality direction of this nexus can lead to misleading policy guidance. Using data on China from 1953 to 2013, this study shows that an application of causality test on the time series of energy consumption and national output has masked a lot of information. The Toda-Yamamoto test with bootstrapped critical values and the newly proposed non-linear causality test reveal no causal relationship. However, a further application of these tests using series in different time-frequency domain obtained from wavelet decomposition indicates that while energy consumption Granger causes economic growth in the short run, the reverse is true in the medium term. A bidirectional causal relationship is found for the long run. This approach has proven to be superior in unveiling information on the energy-growth nexus that are useful for policy planning over different time horizons. Public Library of Science 2018-05-21 /pmc/articles/PMC5962055/ /pubmed/29782534 http://dx.doi.org/10.1371/journal.pone.0197785 Text en © 2018 Ha et al http://creativecommons.org/licenses/by/4.0/ This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Ha, Junsheng
Tan, Pei-Pei
Goh, Kim-Leng
Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title_full Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title_fullStr Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title_full_unstemmed Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title_short Linear and nonlinear causal relationship between energy consumption and economic growth in China: New evidence based on wavelet analysis
title_sort linear and nonlinear causal relationship between energy consumption and economic growth in china: new evidence based on wavelet analysis
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5962055/
https://www.ncbi.nlm.nih.gov/pubmed/29782534
http://dx.doi.org/10.1371/journal.pone.0197785
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