Energy Intensity in the Context of Energy-Growth Nexus considering growth and energy consumption volatility A multicounty Perspective

This study investigates energy growth nexus with a focus on recent trends in falling energy intensity
across the world. The Yamamoto -Kurozumi technique within a cointegration framework is used to
examine both long and short run causal relationships between energy intensity, income and the volatilities of income and energy consumption for 48 countries for the period from 1960 to 2015. The long run estimates show that the income elasticity of energy consumption is significantly less than one for most of the countries included in the sample. These results reconcile with the phenomenon of falling energy intensity in these countries. This implies that increasing income has significantly reduced energy consumption for more than two decades for those countries where significant long run causality has been observed. The other unique findings are the roles of income and energy consumption volatilities on income and energy consumption. The evidence from many countries reveals that increases in income volatility increases the volatility of energy consumption and further significantly reduces the energy use. In addition, the short run dynamic
relationships between energy consumption and income have been observed for almost all countries with no long run significant causality. The rest of findings corresponding to growth, conservation, feedback and neutrality hypotheses of income and energy consumption are in line with the previous literature. Finally, this study sheds light on energy conservation policies related to the efficient use of energy.