A New Look to Energy-GDP Nexus: The Comparison of Income and Sustainable Welfare Approaches in Turkey and G7 Countries

The purpose of this thesis is to investigate the energy consumption-sustainable welfare nexus in G7 economies and Turkey over the period 2000-2012 and to compare these findings with those obtained from energy consumption growth (GDP) nexus. To this end, empirical models arisen herein are analyzed using Kónya (2006) bootstrap heterogeneous panel causality approach which is developed to produce cross-section results. Findings reveal the existence of conservation hypothesis in France and Turkey, feedback hypothesis in Germany, Italy, Japan and the UK, and neutrality hypothesis in Canada and the US once economic growth is used as development proxy. When sustainable welfare index is used as development proxy, on the other hand, the results indicate the existence of growth hypothesis in Turkey as well as the feedback hypothesis in the G7 economies. These findings confirm that energy-sustainable welfare nexus is robust across G7 countries whereas it varies across member states in the energy-growth nexus. However, findings emphasize the importance of the development proxy in the case of Turkey. Moreover, policy implications based on empirical findings are also discussed