Primary energy consumption and economic growth: the case of Greece

Abstract

This paper examines the relationship between primary energy consumption and economic growth in Greece for the period 1965-2019 by using annual data. The main objective of this study is to investigate whether there is a causal relationship between economic growth and energy consumption. In terms of econometric specificity, ordinary least squares regression (OLS) is used to determine the model in the first step, while the vector self-regulating model (VAR) and the Wald test are used to detect causality. The study differs from the literature in terms of examining the individual energy sources. Total primary energy consumption in Greece is examined in relation to economic growth and individual energy sources separately. According to the results, primary energy consumption in Greece has a big impact on economic growth. The energy derived from non-renewable energy sources has the highest consumption rates. Causality tests show that there is a causal relationship between wind energy consumption and the GDP per capita while causality is observed from the GDP per capita to oil, coal, solar and hydropower consumption.

Keywords

• energy consumption
• economic growth
• greece
• causality tests