Asymmetric Panel Causality Analysis of the Relationship Between Renewable Energy aAnd Economic Growth in G7 Countries
The Relationship between Renewable Energy and Economic Growth in G7 Countries
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https://doi.org/10.5281/zenodo.10060843Keywords:
Renewable energy, economic growth, G7 countries, asymmetric panel causalityAbstract
This study aims to examine the relationship between renewable energy and economic growth among G7 countries. The study was conducted by using the data of G7 countries such as Canada, Germany, France, the UK, Italy, Japan, and the USA for the period 1990–2022, from the World Bank database. Reliable bootstrap panel tests were used to assess the causal relationships between the variables, and CADF and CIPS panel unit root tests were applied to determine the stationarity properties. According to the findings, no causality was found between renewable energy and economic growth in G7 countries. However, unidirectional causality was found between economic growth and renewable energy consumption in Germany and Italy. In the US, bidirectional causality was observed between economic growth and renewable energy, i.e., economic growth boosts renewable energy consumption while renewable energy investments support economic growth. The results for Canada, France, the UK, and Japan show that economic growth increases renewable energy consumption, but no feedback effect is observed, i.e., economic growth does not irreversibly increase renewable energy consumption in these countries.
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