Author(s): HE Yong-da, SUN Wei, ZHANG Shuai, School of Statistics, Shanxi University of Finance and Economics, Center for Quantitative Economics, Jilin University
Pages: 33-40+45
Year: 2016 Issue:  4
Journal: On Economic Problems
Keyword:  energy consumption; economic growth; asymmetry; LSTVAR;
Abstract: In this study we examine possible nonlinearities in dynamic interrelationship between energy consumption and economic growth in China for the 1958- 2014 period by using a smooth transition vector autoregressive model( LSTVAR). In order to trace the effects of one variable on another,we calculate Generalized Impulse Response Function( GIRF). The computed impulse response functions demonstrate asymmetric effects of positive versus negative energy consumption shocks on output growth under different economic condition and vice versa. The result finds that in the high- speed economic growth period,with the acceleration of economic growth,the energy consumption also constantly increases,and the improvement of economic growth rate has long- term requirement for the increase of energy consumption,while in the non- high- speed economic growth period,the economic growth caused by energy demand is more significant,bringing about a greater and more long lasting effect on the energy consumption rate. Specifically,we find that negative energy shocks have a greater effect on output growth than positive energy shocks. Similarly,we find that positive output shock has a greater effect on energy consumption whereas negative shocks have almost no effect on energy consumption. The results of this study have clear and important implications for energy economists and policymakers in China.