A note on the causal relationship between energy and GDP in Taiwan

Abstract

This paper re-examines the causality between energy consumption and GDP by using updated Taiwan data for the period 1954–1997. As a secondary contribution, we investigate the causal relationship between GDP and the aggregate as well as several disaggregate categories of energy consumption, including coal, oil, natural gas, and electricity. Applying Granger's technique, we find bidirectional causality between total energy consumption and GDP. We find further that different directions of cause exist between GDP and various kinds of energy consumption.