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An Analysis of the Co-integration and Causality Relationship between Electricity Consumption and Gross Domestic Product (GDP) in the Developing Countries: An Empirical Study of Turkey

Keywords: Electricity consumption , Gross domestic product , Economic growth , Co-integration , Causality

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Abstract:

In this study, long term relationship and causality relationship between electricity consumption and gross domestic product in Turkey for the period 1975-2006 were investigated. As a result of the co-integration analysis made firstly in this study, the long term relationship between the electricity consumption and gross domestic product was found. According to the result of Granger causality analysis made in accordance with vector error correction model, it was determined that there was unidirectional causality relationship between electricity consumption and gross domestic product. According to the findings, it can be said that in the process of economic growth in Turkey, gross domestic product amount was an important variable which affected the electricity consumption positively in the long term and therefore it can be said that it is important to provide the primary energy sources used in electricity energy production and electricity energy in the long term and in time without any interaction for preventing the failures which may arise during the process of economic growth and for the stability of the economic production and consumption process

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