engleski

Causality between electricity consumption and economic growth in Croatia: a bootstrap approach

There is a strong correlation between electricity consumption and economic growth, but the presence of correlation does not necessarily imply causation nor does correlation indicate the direction of causality. In recent years, the world’s scientific literature is increasingly considering the impact of electricity consumption on economic growth. However, the aforementioned problem lacks theoretical and scientific support in Croatia. Empirical research on the direction of causality between economic growth and electricity consumption provides useful information for the creators of economic and energy policy regarding the possible consequences of their decisions on GDP. Therefore, the purpose of this paper is to determine the role of energy in Croatian economic growth via interconnection of electricity consumption and economic activity. This will be achieved by analyzing the available data on GDP and electricity consumption in Croatia for the last six decades using the so-called bootstrap approach. According to the empirical results, causality runs from real GDP to total electricity consumption. Our results differ from most of the studies analyzing both developing (non- OECD) and developed (OECD Member) countries. In addition to empirical results, policy implications and recommendations for future research will also be presented in the paper.

economic growth, electricity consumption, causality analysis, bootstrap approach, Croatia

Ovaj rad je sufinancirala Hrvatska zaklada za znanost projektom IP-2013-11-2203 te Sveučilište u Rijeci potporom istraživanjima br. 13.02.1.3.05.