The relationship between energy and GNP

Abstract

This paper reexamines the casuality between GNP and energy consumption by using updated US data for the period 1947–1979. As a secondary contribution, we investigate the causal relationship between energy consumption and employment. Applying Sims' technique, we find no causal relationship between GNP and energy consumption. We find further that there is a slight unidirectional flow running from employment to energy consumption. Economic interpretations of the empirical results are also presented.