Investigating the Asymmetric Relationship between Economic Growth and Energy Consumption, Considering the Role of the Informal Economy

Document Type : Research Paper

Authors

1 Ph.D. of Economics, University of Lorestan

2 d

3 F

Abstract

This paper examines the asymmetric relationship between economic growth and energy consumption, considering the role of the informal economy. For this purpose, three indicators of official GDP, true GDP (sum of formal and informal GDP), and the relative size of the unofficial sector are considered to examine the growth-energy relationship in the three models and nonlinear ARDL (NARDL) and the Hatemi-J asymmetric causality (2012), is used during the period 1967-2018. The results of the NARDL model show that in the long-run, positive and negative shocks to official GDP, true GDP, and the relative size of the unofficial economy will increase energy consumption. Also, in the short-run, positive and negative shocks to official GDP and true GDP in the current period will increase energy consumption. While the only positive shock of the unofficial economy in the current period increases energy consumption. The results of asymmetric causality show that there is a bilateral causality between energy consumption and the size of unofficial sector. While there is the unilateral causality from true GDP to energy consumption and there is a bilateral causality between the positive shocks of formal GDP, true GDP, and energy consumption. Therefore, energy protection and efficient use of energy in various economic activities can play a major role in controlling the unofficial economy and directing activities to the formal sector.
 

Keywords

References

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new economy and trad
Volume 16, Issue 2
February 2022
Pages 151-179

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History

  • Receive Date: 03 August 2021
  • Revise Date: 01 November 2021
  • Accept Date: 16 November 2021

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