What if energy time series are not independent? Implications for energy-GDP causality analysis

Time series of electricity, petroleum products, and renewables are found to be highly correlated with total energy consumption. Applying this insight to the huge literature on energy-GDP causality explains that the results of total energy-GDP causality tests frequently coincide with the results of energy type-GDP tests. Using the test by Toda–Yamamoto in combination with a cointegration-based testing approach, we detect such cases of concordance for 92% of the countries in our sample of 65 countries. We infer that drawing specific economic conclusions with regard to single types of energy from bivariate causality analysis is difficult.