Are shocks to energy consumption permanent or temporary? Evidence from 182 countries

By Paresh Kumar Narayan, Russell Smyth *. 2007

231 citations recorded by the source corpus.

This paper applies univariate and panel data unit root tests to annual panel data for 182 countries over the period 1979-2000 to examine the stationarity properties of per capita energy consumption. The univariate unit root test can only reject the unit root null for 29 per cent of the countries at the 10 per cent level or better without a trend and 37 per cent of the countries at the 10 per cent level or better with a trend. However, it is often argued that unit root tests have low power with short spans of data and therefore failure to reject the unit root null should be treated with caution. When we apply the panel data unit root test we find overwhelming evidence that energy consumption is stationary. We discuss the implications of these findings for econometric modeling and policy formulation.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/7cbd2ceebfb738101c35176dbd78ca37e7e06482

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Citations in the corpus

Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries (2009, background): “There has been a surge in interest in applying panel unit root and panel stationarity tests to examine the stationarity properties of energy consumption (see Lee, 2005; Al-Iriani, 2006; Narayan & Smyth, 2007; Chen & Lee, 2007; Hsu et al, 2008; Joyeux & Ripple 2007; Lee & Chang, 2008).”
The causal relationship between energy consumption and economic growth in Lebanon (2012, background): “Thus, if E follows a non-stationary process, any shock such as one resulting from an energy price shock, will be transmitted to other macroeconomic variables, and given the importance of energy in the economy could potentially have disastrous effects (Apergis and Payne, 2010; Narayan and Smyth, 2007”
Non-Linear Unit Root Properties of Crude Oil Production (2009, unknown): “Related studies that have tested for a unit root in energy consumption are Al-Iriani (2006), Chen and Lee (2007), Hsu et al. (2007), Joyuex and Ripple (2007), Lee (2005), Lee and Chang (2007, 2007a) and Narayan and Smyth (2007).”
The role of globalization on the recent evolution of energy demand in India: Implications for sustainable development (2016, methodology): “…energy market-related variables are either integrated of order I[(1)] or I(0) in their nature and one can rarely be confronted with I(2) series (Narayan and Smyth, 2007; 2008), justifying the application of ARDL for our analysis; (iv) the ARDL technique solves the issue of endogeneity in the…”
Examining carbon emissions economic growth nexus for India: A multivariate cointegration approach (2010, methodology): “Quattara (2004) argued that the computed F-statistics provided by Pesaran et al. (2001) are not valid in the presence of I(2) variables.”
Applied econometrics and implications for energy economics research (2015, background): “root test to energy consumption for a large number of countries (Hasanov and Telatar, 2011; Narayan and Smyth, 2007).”