Analysis of the relationship between trade openness, human capital, renewable energy and GDP growth

After the industrial revolution, ways to increase economic growth have been sought to continuously increase the welfare level of nations. The consumption of natural resources, especially fossil fuels, has increased exponentially worldwide as the most important input source to continuously increase production and consumption activities. Today, the effects of renewable energy production and utilization are being investigated with the effect of turning to alternative energy sources to prevent environmental problems. In addition, the importance of human capital in the increase in the welfare of societies is increasing. Therefore, in this study, the effects of renewable energy use, human capital and trade openness variables on the increase in GDP per capita in Turkey and the European Union are investigated with ARDL cointegration test and Toda-Yamamoto Causality Tests. According to the test findings, renewable energy use has a negative effect for the European Union in the short and long run, while it has no significant effect in Turkey. While the human capital variable has a positive effect in the short and long run for the European Union countries, it has a positive effect in Turkey only in the short run. On the other hand, while the effects of openness to foreign trade are different in the short run in the European Union, it has positive effects in the short run in Turkey. In addition, Toda-Yamamoto causality test reveals significant causal effects of these variables on GDP per capita in the European Union for human capital and trade openness, but not for Turkey.