Multivariate Granger Causality between Electricity Generation, Exports, Prices and Economic Growth in Turkey

This study is the first employing annual data for Turkey from 1970 to 2010 to examine the short and long-run causal relationship between economic growth, electricity generation, exports and prices in a multivariate model. According to the bounds test results, when electricity generation and economic growth are the dependent variable there are two cointegrating relationships. According to the results, long-run equilibrium relationship and long-term causality are found between economic growth, electricity generation, export and price. Hence, in the short-run, there are bi-directional causalities between economic growth- electricity generation, economic growth-export and electricity generation-export with feedback effect. Keywords: Electricity generation; economic growth; bounds testing; Granger causality; Turkey. JEL Classifications: O4; Q

Multivariate Granger Causality Between Electricity Generation Exports Prices and Economic Growth in Turkey

This study is the first employing annual data for Turkey from 1970 to 2010 to examinethe short and long-run causal relationship between economic growth, electricity generation, exportsand prices in a multivariate model. According to the bounds test results, when electricity generationand economic growth are the dependent variable there are two cointegrating relationships. Accordingto the results, long-run equilibrium relationship and long-term causality are found between economicgrowth, electricity generation, export and price. Hence, in the short-run, there are bi-directionalcausalities between economic growth- electricity generation, economic growth-export and electricitygeneration-export with feedback effect.</p