Granger non-causality tests between (non)renewable energy consumption and output in Italy since 1861: the (ir)relevance of structural breaks

Abstract

The present paper considers an Italian dataset with an annual frequency from 1861 to 2000. It implements Granger non-causality tests between energy consumption and output contrasting methods allowing for structural change with those imposing parameter stability throughout the sample. Though some econometric details can differ, results have clear policy implications. Energy conservation policies are likely to hasten an underlying tendency of the economy towards a more efficient use of fossil fuels. The abandonment of traditional energy carriers was a positive change.renewable energy, non-renewable energy, real GDP, Granger-causality, cointegration