Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 10-2021: Energy Use Beyond GDP: A Dynamic Panel Analysis with Different Development Indicators

Chiara Ravetti () and Carlo Cambini ()
Additional contact information
Chiara Ravetti: Politecnico di Torino, Department of Management, Postal: Corso Duca degli Abruzzi 24, 10129, Turin, Italy
Carlo Cambini: Politecnico di Torino, Department of Management, Italy and Copenhagen School of Energy Infrastructure, Copenhagen Business School, Denmark

Abstract: This paper analyses the the role of energy consumption in countries with heterogeneous development paths. Energy is a fundamental input in human activities and there is a broad literature attesting the link between economic growth and energy use, even though the relationship is far from linear. We examine how the trajectory of energy consumption and development varies depending on the definition of development adopted, comparing classic GDP, adjusted net national income, life expectancy and the human development index in different regions of the world. Applying a pooled mean-group estimator in a dynamic auto-regressive distributed lag model for 127 countries over the period 1970-2016, we find that energy plays a different role in fuelling short and long-run development, depending on the area of the world, and it is crucial to distinguish different measures of development to capture effects that can even move in opposite directions.

Keywords: Economic development; Energy consumption; Dynamic panel

JEL-codes: C23; O11; Q43

52 pages, April 13, 2021

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