Causality between Energy and Economic Growth: the Italian case

Abstract

The causal relationship between economic growth and energy consumption represents a widely studied topic in energy economics literature. Although it is very well known that there is a strong correlation between energy use and growth, the issue of causality still remains to be answered. This study aims to investigate the possibility of the energydemand- led growth and growth-driven energy demand hypotheses in Italy by testing the causality between real GDP and electric power consumption through an ECM model. Results do not reveal any causality linkage.Causality; Economic growth; Energy Consumption