Fractional integration between energy use and GDP : an application to Switzerland

Baranzini, Andrea ; Bareit, Markus ; Mathys, Nicole A. ; Weber, Sylvain

This paper investigates the short and long run relationships between energy consumption and real GDP in Switzerland. We apply cointegration and error correction models to data covering a long period, from 1950 to 2009, and distinguish between different energy sources. Our results show that there is a separate long run relationship from real GDP to energy consumption of heating oil, fuel and... Plus

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    Summary
    This paper investigates the short and long run relationships between energy consumption and real GDP in Switzerland. We apply cointegration and error correction models to data covering a long period, from 1950 to 2009, and distinguish between different energy sources. Our results show that there is a separate long run relationship from real GDP to energy consumption of heating oil, fuel and electricity. Conversely, we do not find any significant relationship from energy consumption towards GDP. Energy abatement policies are therefore not expected to have a negative impact on the growth of the Swiss economy.