Electricity Consumption, Oil Prices, Gross Fixed Investment and Economic Growth: Evidence From G7 Countries

In this study, the relationship between economic growth and electricity consumption, oil price and gross fixed investment for the period of 1980 to 2017 of G7 countries was empirically analyzed. For this purpose, firstly, the stationarities of each country series were determined. The ARDL bound test has been passed because the series are stationary in I (0) or I (1). According to the ARDL bound test results, electricity consumption and gross fixed investment have a positive impact on economic growth. In the Granger causality test, there is unidirectional Granger causality running from economic growth to electricity consumption and from economic growth to gross fixed investment in USA. In Canada, uni-directional running from economic growth to gross fixed investment, gross fixed investment to electricity consumption and oil price to gross fixed investment are found. Additionally, bi-directional causality relationship between economic growth and electricity consumption, economic growth and oil price was determined. In Japan, oil price is the cause of fixed capital investments, economic growth is the cause of oil price and electricity consumption is the cause of oil price