Technical Journal, Vol. 17 No. 1, 2023.
Original scientific paper
https://doi.org/10.31803/tg-20211116203435
The Nexus between Energy Consumption Shocks and Economic Growth: Using BVAR Approach
Ezatollah Abbasian
; Department of Public Administration, Faculty of Management, University of Tehran, Tehran, Iran
Salaheddin Manochehri
orcid.org/0000-0001-5619-632X
; Faculty of Economics and Social Sciences, Department of Economics, Bu-Ali Sina University, Hamedan, Iran
Abstract
This paper examines the nexus between economic growth and energy consumption shock, over the period 1990-2020, in Iran. We employ a Bayesian vector
autoregressive (BVAR) with new prior functions, which will give results more acceptable consequences than the classical methods to study these relationships. This study estimates
the relationship between energy consumption shocks and economic growth within a multivariate BVAR framework by including gross capital formation, Labor and carbon dioxide
emission. The multivariate impulse responses to shocks in all the variables are obtained. The results show that, there is a positive impact of energy consumption shocks on
economic growth in Iran and this means that energy consumption is crucial for economic growth. Also, the responses of economic growth to one-unit shock of gross capital
formation and labor force are positive and the responses of economic growth to the one-unit shock of carbon dioxide emission is are negative.
Keywords
Bayesian VAR; economic growth; energy consumption; Iran
Hrčak ID:
292466
URI
Publication date:
15.3.2023.
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