The Impact of Renewable Energy Consumption on Economic Growth: Empirical Findings for Türkiye (1990-2022)
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Keywords:
Renewable energy consumption , Economic growth, Bayer-Hanck Cointegration Analysis, Granger Causality AnalysisAbstract
Energy is an important factor of production. The efficient use of this factor is closely related to the economic growth of countries. There are many factors that affect economic growth; however, energy has recently become even more significant than other factors of production With technology and industrialization, energy use has gradually increased and become more important. Energy consumption has become increasingly important for economic growth. Renewable energy production and consumption have become crucial variables that no economy can afford to ignore. The aim of this study is to investigate the long-term and short-term effects of renewable energy consumption on economic growth using annual data from 1990 to 2022. In the study, Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) stationarity tests revealed that the variables are stationary at first difference. Bayer-Hanck Cointegration Analysis was applied to investigate the long-run relationship, revealing that the variables move together in the long run and are cointegrated. According to the coefficient estimation results obtained by the FMOLS method, a 1% increase in the share of renewable energy consumption in total energy consumption leads to a 5.7% increase in the growth variable in the long run. As a result of the error correction model, it is determined that the variables are also correlated in the short run. In the long run, 40.5% of the short-run deviations between the co-moving series disappear and the series converge back to the long-run equilibrium value. Moreover, a bidirectional causality relationship between renewable energy consumption and economic growth has been identified.
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