Granger causality between energy use and economic growth in France with using geostatistical models

Abstract

This paper introduces a new way for investigating linear and nonlinear Granger causality between energy use and economic growth in France over the period 1960_2005 with using geostatistical models (kiriging and IDW). This approach imitates the Granger definition and structure and also, improves it to have better ability for probe nonlinear causality. Results of both VEC and Improved-VEC (with geostatistical methods) are almost same. Both show the existence of long run unidirectional causality from energy consumption to economic growth. The geostatistical analyzing shows there are some Exponential functions in VEC structure instead of linear form.Granger causality; Energy consumption; GDP; Geostatistical model; France