Relationship between energy consumption and economic growth in Turkish economy (1972-2011)

Energy is recognized as one of the important factors that is used during products production process by capital and labor in some biophysical models. Energy consumption has increased substantially in the World especially after the Industrial Revolution and 1973 Oil Crisis. In this study, the causal relationships between energy consumptions (petroleum, electricity, per capita and total primary energy consumption, carbon dioxide emission) and economic growth are estimated, by using Johansen-Juselius cointegration test, Dolado-Lütkepohl VAR, generalized impulse-response and variance decomposition analyses for Turkish economy, covering the period of 1972-2011. According to the results of Johansen-Juselius cointegration test there is no co-movement between energy consumption and economic growth in the long run, but Dolado-Lütkepohl VAR analyze indicated that energy is an important input for Turkish economic growth in the short run. Unidirectional causality runs from petroleum, electricity, primary energy consumption and carbon dioxide emission to economic growth, but empirical evidence does not support reverse causality. Generalized impulse-response and variance decomposition analyses confirm the results of Dolado-Lütkepohl VAR analyze.