Energy prices, energy conservation, and economic growth : Evidence from the postwar United States

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

13 Scopus Citations
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Author(s)

  • Jang C. Jin
  • Jai-Young Choi
  • Eden S.H. Yu

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)691-699
Journal / PublicationInternational Review of Economics and Finance
Volume18
Issue number4
Publication statusPublished - Oct 2009

Abstract

The effects of energy prices and energy conservation on economic growth have been examined empirically for the postwar U.S. economy. A vector autoregressive model includes real GDP, real capital, labor, real energy prices, and the Divisia energy index. A key feature of our finding is that some damaging effects of energy conservation on the macroeconomy are statistically insignificant in the short run, and the insignificant short-run effects are quickly enervated over time. Alternative measures of energy use also suggest that energy conservation has no significant impact on real output growth. The findings are generally consistent with the neoclassical position that real economic growth of the United States is neutral with respect to changes in energy use. One exception is the case that energy prices are omitted from the model. © 2008 Elsevier Inc. All rights reserved.

Research Area(s)

  • Economic growth, Energy conservation, Energy prices, Impulse responses, Variance decompositions