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Showing papers on "Real gross domestic product published in 2011"


Journal ArticleDOI
TL;DR: For US annual data that include World War II, the estimated multiplier for temporary defense spending is 04-05 contemporaneously and 06-07 over 2 years if the change in defense spending was “permanent” (gauged by Ramey's defense news variable), the multipliers are higher by 01-02 Since all estimated multipliers were significantly less than 1, greater spending crowds out other components of GDP, particularly investment as mentioned in this paper.
Abstract: For US annual data that include World War II, the estimated multiplier for temporary defense spending is 04–05 contemporaneously and 06–07 over 2 years If the change in defense spending is “permanent” (gauged by Ramey's defense news variable), the multipliers are higher by 01–02 Since all estimated multipliers are significantly less than 1, greater spending crowds out other components of GDP, particularly investment The lack of good instruments prevents estimation of reliable multipliers for nondefense purchases; multipliers in the literature of two or more likely reflect reverse causation from GDP to nondefense purchases Increases in average marginal income tax rates (measured by a newly constructed time series) have significantly negative effects on GDP When interpreted as a tax multiplier, the magnitude is around 11 The combination of the estimated spending and tax multipliers implies that the balanced-budget multiplier for defense spending is negative We have some evidence that tax changes affect GDP mainly through substitution effects, rather than wealth effects

845 citations


Journal ArticleDOI
TL;DR: In this paper, a structural model that encompasses both symmetric and asymmetric models as special cases is proposed, and correctly computed impulse responses are of roughly the same magnitude in either direction, consistent with formal tests for symmetric responses.
Abstract: How much does real gross domestic product (GDP) respond to unanticipated changes in the real price of oil? Commonly used censored oil price vector autoregressive models suggest a substantial decline in real GDP in response to unexpected increases in the real price of oil, yet no response to unexpected declines. We show that these estimates are invalid. Based on a structural model that encompasses both symmetric and asymmetric models as special cases, correctly computed impulse responses are of roughly the same magnitude in either direction, consistent with formal tests for symmetric responses. We discuss implications for theoretical models and for policy responses to energy price shocks.

501 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between renewable energy consumption and economic growth for a panel of six Central American countries over the period 1980-2006, and found a long-run equilibrium relationship between real GDP, renewable energy, real gross fixed capital formation, and the labor force with the respective coefficients positive and statistically significant.

483 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the long-run relationship between energy consumption and real GDP, including energy prices, for 25 OECD countries from 1981 to 2007, and found that energy consumption is price-inelastic.

450 citations


Journal ArticleDOI
TL;DR: Wang et al. as mentioned in this paper applied the panel unit root, heterogeneous panel cointegration and panel-based dynamic OLS to re-investigate the comovement and relationship between energy consumption and economic growth for 30 provinces in mainland China from 1985 to 2007.

305 citations


Journal ArticleDOI
TL;DR: In this paper, the role of both the amount and share of renewable energy consumption in economic welfare using Cobb-Douglas type production functions was assessed using multivariate OLS and SPSS software for China from 1978 to 2008.
Abstract: Over the last years renewable energy sources have increased their share on electricity generation of China due to environmental and security of supply concerns. In this work author assesses the role of both the amount and share of renewable energy consumption in economic welfare using Cobb-Douglas type production functions. This assessment is carried out by multivariate OLS and SPSS software for China from 1978 to 2008. Results indicate that a 1% increase in renewable energy consumption (REC) increases real GDP by 0.120%, GDP per capita by 0.162%, per capita annual income of rural households by 0.444%, and per capita annual income of urban households by 0.368% respectively: the impact of renewable energy consumption share (SREC) on economic welfare is insignificant, and an increasing share of REC negatively affects economic welfare growth to a certain extent. In this paper, the cost, structural demand, accounting mechanism and policy reasons of renewable energy development are interpreted. Marginal effects analysis show that the shape of sound and robust renewable energy institutions and policies would matter for increasing the standards of economic welfare in the context of speeding up renewable energy development and increasing share of renewable energy consumption, especially the goal-oriented policy refinement should be addressed efficiently in improvement households income while increasing share of renewable energy consumption. (C) 2011 Elsevier Ltd. All rights reserved.

269 citations


Journal ArticleDOI
TL;DR: The authors examined the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions.
Abstract: This paper investigates the short-term effects of fiscal consolidation on economic activity in OECD economies. We examine the historical record, including Budget Speeches and IMFdocuments, to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Using this new dataset, our estimates suggest fiscal consolidation has contractionary effects on private domestic demand and GDP. By contrast, estimates based on conventional measures of the fiscal policy stance used in the literature support the expansionary fiscal contractions hypothesis but appear to be biased toward overstating expansionary effects.

250 citations


Posted Content
TL;DR: In this article, the authors provided new empirical evidence on the relationship between energy consumption and economic growth for 21 African countries over the period from 1970 to 2006, using recently developed panel cointegration and causality tests.
Abstract: The aim of this paper is to provide new empirical evidence on the relationship between energy consumption and economic growth for 21 African countries over the period from 1970 to 2006, using recently developed panel cointegration and causality tests. The countries are divided into two groups: net energy importers and net energy exporters. It is found that there exists a long-run equilibrium relationship between energy consumption, real GDP, prices, labor and capital for each group of countries as well as for the whole set of countries. This result is robust to possible cross-country dependence and still holds when allowing for multiple endogenous structural breaks, which can differ among countries. Furthermore, we find that decreasing energy consumption decreases growth and vice versa, and that increasing energy consumption increases growth, and vice versa, and that this applies for both energy exporters and importers. Finally, there is a marked difference in the cointegration relationship when country groups are considered.

214 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between electricity consumption and economic growth for 88 countries categorized into four panels based on the World Bank income classification (high, upper middle, lower middle, and low income) within a multivariate panel framework over the period 1990-2006.

211 citations


Book
24 Jun 2011
TL;DR: A review of the major recent economic developments in Africa, this overview describes the approach and methodology used in the study of African successes can be found in this article, with a focus on economic development in Sub-Saharan Africa.
Abstract: Over the past decade Sub-Saharan Africa has seen a remarkable turnaround in economic performance. After years of stagnation, economic growth has spurted gross domestic product (GDP) grew from an annual average rate of less than 2 percent in 1978-95 to nearly 6 percent over 2003-08. Inflation is half its level of the mid-1990s. Private capital flows have risen to $50 billion, exceeding foreign aid. Exports are growing, as is private sector activity. The number of democratic regimes has risen and the security situation has improved. The poverty rate is falling by 1 percentage point a year. Countries such as Ethiopia, Ghana, Mauritania, and Rwanda are on track to reach many of the millennium development goals. Nine African countries have achieved or are on track to achieve the target for extreme poverty. Among other encouraging trends are more fair and effective leadership, an improving business climate, increasing innovation, a more involved citizenry, and growing reliance on home-grown solutions. More and more, Africans are driving African development. This increased dynamism in Sub-Saharan Africa is evident across a broad swath of countries. It has created optimism that Africa's favorable development performance will be long lasting and that it could dramatically transform countries in the region. Along the way, the prevailing discourse on Africa's economic development has shifted from whether the region will develop to how the region is developing. After a review of the major recent economic developments in Africa, this overview describes the approach and methodology used in the study of African successes.

208 citations


Posted Content
TL;DR: In this paper, the authors attempted to analyze the dynamics of renewable energy consumption, economic growth, and CO2 emissions using structural VAR approach using unit root tests and showed that all variables are non-stationary at their level form and stationary in first difference form and cointegration analysis.
Abstract: This study has attempted to analyze the dynamics of renewable energy consumption, economic growth, and CO2 emissions For the analysis, we used structural VAR approach Results of unit root tests show that all variables are non-stationary at their level form and stationary in first difference form and cointegration analysis, analyzed through Johansen-Juselius (1990), shows that there is no evidence of cointegration among the test variables The innovations analysis of study reveals that a positive shock on the consumption of renewable energy source increases GDP and decreases CO2 emissions and a positive shock on GDP have a very high positive impact on the CO2 emissions The variance decomposition shows the share of consumption of renewable energy source explained a significant part of the forecast error variance of GDP and a relatively smaller or negligible part of the forecast error variance of CO2 emissions

Journal ArticleDOI
TL;DR: In this article, the authors provided new empirical evidence on the relationship between energy consumption and economic growth for 21 African countries over the period from 1970 to 2006, using recently developed panel cointegration and causality tests.

Journal ArticleDOI
TL;DR: In this article, the authors examined the relationship between renewable and non-renewable electricity consumption and economic growth for 16 emerging market economies within a multivariate panel framework over the period 1990-2007.

Journal ArticleDOI
TL;DR: This article examined the causal relationship between biomass energy consumption and real gross domestic product (GDP) within a multivariate framework and revealed unidirectional causality from biomass consumption to real GDP supportive of the growth hypothesis.
Abstract: This empirical note utilizes US annual data from 1949 to 2007 to examine the causal relationship between biomass energy consumption and real gross domestic product (GDP) within a multivariate framework. Toda-Yamamoto causality tests reveal unidirectional causality from biomass energy consumption to real GDP supportive of the growth hypothesis.

Posted Content
TL;DR: In this article, the Toda and Yomamoto Granger Causality Test was used to carry out the test of causality between electricity consumption and economic growth from 1971 to 2008.
Abstract: Research into the electricity-economic growth nexus has important implications for energy conservation measures and environmental policy. However, results from the energy-economic growth nexus have been mixed in the literature on Ghana. This posses serious problems for the country’s energy policy. Much research is thus, required to establish the direction of causality between energy and economic growth. Nonetheless, less evidence is available for Ghana. It is against this background that this study seeks to investigate the direction of causality between a type of energy, electricity, and economic growth to add to the existing argument in the literature. The Toda and Yomamoto Granger Causality Test was used to carry out the test of causality between electricity consumption and economic growth from 1971 to 2008. The results obtained herein revealed that there exists a unidirectional causality running from economic growth to electricity consumption. Thus, data on Ghana supports the Growth-led-Energy Hypothesis. The results imply that electricity conservation measures are a viable option for Ghana. Keywords : Ghana; Real GDP per capita; Electricity consumption; Toda and Yomamoto; Granger Causality Test; Bounds cointegration JEL Classifications: Q400; Q430

Journal ArticleDOI
Henry Tam1
TL;DR: This paper used dynamic panel data estimation to demonstrate that the U-shaped relationship between feminization of the labor force and real GDP per capita holds up as an intertemporal relationship, using a panel data of about 130 countries from 1950 to 1980.

Journal ArticleDOI
TL;DR: In this paper, the authors define a non-stationary and non-trending series as a stationary series characterized by without unit root and a trended series as one with unit root.
Abstract: Testing data for stationarity is very important in research where the underlying variables based on time. Moreover time series data analysis has many applications in many areas including studying the relationship between wages and house prices, profits and dividends, and consumption and GDP. An important econometric task is determining the most appropriate form of the trend in the data. Many economic and financial time series exhibit trending behavior or non-stationarity in the mean. Leading examples are asset prices, exchange rates and the levels of macroeconomic aggregates like real GDP. In the beginning of the decade 1970s there was a great debate about this topic. Granger and Newbold (1974) were the researchers, who give the idea that the macroeconomic data as a rule contained stochastic trends, and this data is characterized by unit root, they also suggest that using these variables in econometric models may lead towards spurious regressions. So testing for stationarity is very important because the whole results of the regression might be fabricated. In simple words we can say that trended series is called non-stationary and with unit root and on the other hand non-trended series is a stationary series characterized by without unit root.

Journal ArticleDOI
TL;DR: In this article, the effects of political instability on economic growth were empirically determined using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004.
Abstract: The purpose of this paper is to empirically determine the effects of political instability on economic growth. Using the system-GMM estimator for linear dynamic panel data models on a sample covering up to 169 countries, and 5-year periods from 1960 to 2004, we find that higher degrees of political instability are associated with lower growth rates of GDP per capita. Regarding the channels of transmission, we find that political instability adversely affects growth by lowering the rates of productivity growth and, to a smaller degree, physical and human capital accumulation. Finally, economic freedom and ethnic homogeneity are beneficial to growth, while democracy may have a small negative effect.

Journal ArticleDOI
TL;DR: There is no evidence of changes in the relationships for any country over the periods estimated, indicating that shifts in the major causes of illness and death over time do not appear to have influenced the link between health and economic growth.
Abstract: This paper uses Johansen multivariate cointegration analysis to examine the relationship between health and GDP for 13 OECD countries over the last two centuries, for periods ranging from 1820-2001 to 1921-2001. A similar, long run, cointegrating relationship between life expectancy and both total GDP and GDP per capita was found for all the countries estimated. The relationships have a significant influence on both total GDP and GPD per capita in most of the countries estimated, with 1% increase in life expectancy resulting in an average 6% increase in total GDP in the long run, and 5% increase in GDP per capita. Total GDP and GDP per capita also have a significant influence on life expectancy for most countries. There is no evidence of changes in the relationships for any country over the periods estimated, indicating that shifts in the major causes of illness and death over time do not appear to have influenced the link between health and economic growth.

Posted Content
TL;DR: The authors reconstructs the GNI from the output side for medieval and early modern Britain and finds that, in contrast to the long run stagnation of living standards suggested by daily real wage rates, output-based GNI per capita exhibits modest but positive trend growth.
Abstract: This paper reconstructs GDP from the output side for medieval and early modern Britain. In contrast to the long run stagnation of living standards suggested by daily real wage rates, output-based GDP per capita exhibits modest but positive trend growth. One way of reconciling the two series is through variation in the annual number of days worked, but there are also reasons to doubt the representativeness of the sharp rise and fall of daily real wage rates in the late middle ages, which creates the impression of no trend improvement of living standards. Acknowledgements: This paper forms part of the project "Reconstructing the National Income of Britain and Holland, c.1270/1500 to 1850", funded by the Leverhulme Trust, Reference Number F/00215AR. It is also part of the Collaborative Project HI-POD supported by the European Commission's 7th Framework Programme for Research, Contract Number SSH7-CT-2008-225342. We are grateful to Richard Britnell, Ben Dodds, John Hatcher, Leigh Shaw-Taylor, Philip Slavin, Richard Smith, Jan de Vries and seminar/conference participants at Cambridge, Durham, Evanston, LSE, Tokyo, Reading, Utrecht, Venice, Warwick and Yale for helpful comments and suggestions.

Journal ArticleDOI
TL;DR: In this article, the authors investigated the effect of FDI on economic growth of China and India, and found that 1% increase in FDI would result in 0.07% and 0.02% increase, respectively, in India and China, respectively.
Abstract: Present paper attempts to investigate the effect of FDI on economic growth of China and India. To take care of the issue of structural change in economy, time period of the study is taken to be 1993-2009. First of all we built our modified growth model from basic growth model. The factors included in growth model were GDP, Humal Capital, Labor Force, FDI and Gross Capital Formation, among which GDP was dependent variable while rest four were independent variables. After running OLS (Ordinary Least Square) method of regression we found that 1% increase in FDI would result in 0.07% increase in GDP of China and 0.02% increase in GDP of India. We also found that China’s growth is more affected by FDI, than India’s growth. The study also provides possible reasons behind China’s great show of FDI and the lessons India should learn from China for better utilization of FDI.

Journal ArticleDOI
TL;DR: In this article, the authors used a CGE model of the Scottish economy to consider the factors influencing the impacts of one form of technological change (improvements in energy efficiency) on absolute levels of CO2 emissions, on the carbon intensity of the economy (CO2 emissions relative to real GDP), and the per capita EKC relationship.

Journal ArticleDOI
TL;DR: This paper used a sequence of government budget constraints to motivate estimates of returns on the US Federal government debt, which differ conceptually and quantitatively from the interest payments reported by the US government.
Abstract: This paper uses a sequence of government budget constraints to motivate estimates of returns on the US Federal government debt. Our estimates differ conceptually and quantitatively from the interest payments reported by the US government. We use our estimates to account for contributions to the evolution of the debt-GDP ratio made by inflation, growth, and nominal returns paid on debts of different maturities. (JEL E23, E31, E43, G12, H63) paper shows contributions that nominal returns, the maturity composition of the debt, inflation, and growth in real gross domestic product (GDP) have made to the evolution of the US debt-GDP ratio since World War II. Among the questions we answer are the following. Did the United States inflate away much of the debt by using inflation to pay negative real rates of return? Occasionally, but not usually. Did high net-of-interest deficits propel the debt-GDP ratio upward? Considerably during World War II, but not too much after that. How much did growth in GDP contribute to holding down the debt-GDP ratio? A lot. How much did variations in returns across maturities affect the evolution of the debt-GDP ratio? At times substantially, but, on average, not much since the end of World War II. Of necessity, our answers to these questions rely on our own estimates of returns on government debt, not the series for interest payments reported by the US government.1 The government budget constraint determines the evolution of the ratio of government debt to GDP. We propose an accounting scheme that emerges from a decomposition of the government's period-by-period budget constraint, to be described and justified in Section I. We use prices of indexed and nominal debt of each maturity to construct one-period holding period returns on government IOU's of various maturities. Multiplying the vector of returns by the vector of quantities

Journal ArticleDOI
TL;DR: In this article, the socio-economic causes of terrorism and political violence in 12 countries in Western Europe were investigated and the classical economic argument of opportunity cost is confirmed that is, the larger is the set of current economic opportunities for individuals the lower is the likelihood or willingness for them to be involved in a terrorist activity.

Journal ArticleDOI
TL;DR: In this article, the authors review the literature on finance-growth nexus and investigate the causality between financial development and economic growth in sub-Saharan Africa for the period 19752005, using panel co-integration and panel GMM estimation for causality.
Abstract: In this paper we review the literature on the finance-growth nexus and investigate the causality between financial development and economic growth in sub-Saharan Africa for the period 19752005. Using panel co-integration and panel GMM estimation for causality, the results of the panel co-integration analysis provide evidence of no long-run relationship between financial development and economic growth. The empirical findings in the paper show a bi-directional causal relationship between the growth of real GDP per capita and the domestic credit provided by the banking sector for the panels of 24 sub-Saharan African countries. The findings imply that African countries can accelerate their economic growth by improving their financial systems and vice versa.

Journal ArticleDOI
TL;DR: In this paper, the authors estimate a Bayesian Structural Autoregression model and a Fully Simultaneous System approach to analyze the macroeconomic effects of fiscal policy and show that positive government spending shocks, in general, have a negative effect on real GDP; lead to "crowding-out" effects of private consumption and investment; have a persistent and positive effect on the price level and a mixed impact on the average financing cost of government debt.
Abstract: With a new quarterly dataset we estimate a Bayesian Structural Autoregression model and a Fully Simultaneous System approach to analyze the macroeconomic effects of fiscal policy. Results show that positive government spending shocks, in general, have a negative effect on real GDP; lead to “crowding-out” effects of private consumption and investment; have a persistent and positive effect on the price level and a mixed impact on the average financing cost of government debt. Explicitly considering the government debt dynamics in the model is also important. A VAR counter-factual exercise confirms that unexpected positive spending shocks create relevant “crowding-out” effects.

Journal Article
TL;DR: In this paper, the authors examined the effects of selected macroeconomic variables on the stock market index in South Africa and found that South Africa's stock market is positively influenced by the growth rate of real GDP, the ratio of the money supply to GDP and the U.S. government bond yield.
Abstract: This paper examines the effects of selected macroeconomic variables on the stock market index in South Africa. The exponential GARCH (Nelson, 1991) model is applied. It finds that South Africa’s stock market index is positively influenced by the growth rate of real GDP, the ratio of the money supply to GDP and the U.S. stock market index and negatively affected by the ratio of the government deficit to GDP, the domestic real interest rate, the nominal effective exchange rate, the domestic inflation rate, and the U.S. government bond yield. Therefore, to maintain a robust stock market, the authorities are expected to pursue economic growth, fiscal prudence, a higher ratio of the money supply to GDP, a lower real interest rate, depreciation of the rand, and/or a lower inflation rate. Keywords: Stock market; Monetary policy; Fiscal policy; Interest rates; Exchange rates; Inflation JEL Classifications: E44; G15

Journal ArticleDOI
TL;DR: In this article, the authors extended the relationship between renewable and non-renewable energy consumption and economic growth to the case of developed and developing countries over the period 1990-2007.
Abstract: This study extends recent work on the relationship between renewable and non-renewable energy consumption and economic growth to the case of developed and developing countries over the period 1990–2007. Heterogeneous panel cointegration procedures show a long-run equilibrium relationship between real GDP, renewable energy consumption, non-renewable energy consumption, real gross fixed capital formation, and the labor force with the respective coefficient estimates positive and statistically significant for developed and developing country panels. The results from the panel error correction models reveal bidirectional causality between renewable and non-renewable energy consumption and economic growth in the short- and long-run for each country panel.

22 Jun 2011
TL;DR: The first decade of the new millennium brought a dramatic increase in the real price of crude petroleum as mentioned in this paper, reaching an average of nearly $100 a barrel in 2008 (see the far right panel of Figure 1).
Abstract: The first decade of the new millennium brought a dramatic increase in the real price of crude petroleum. The price (in 2009 dollars) rose from about $30 a barrel in 2003 to an average of nearly $100 a barrel in 2008 (see the far right panel of Figure 1). Such a rapid price increase was not unprecedented, though. The price of oil rose similarly during the 1970s (middle panel) and during the U.S. Civil War (left panel). The oil price increase during the 1970s was spurred by three dramatic geopolitical events: the embargo and production cutbacks by the Arab members of OPEC in 1973-4; the Iranian revolution in 1978-9; and the Iran-Iraq war which began in 1980. A century earlier, strong demand associated with the U.S. Civil War and a big tax on crude's competitor, alcohol, were factors in a comparable boom. By contrast, the oil price run-up of 2005-8 did not seem to be associated with significant geopolitical disruptions. The three episodes shown in Figure 1 have one theme in common: declining production from the maturing oilfields on which the world had been depending at the time. Flows from the initial Pennsylvanian fields fell quickly as the reservoirs were exploited, and total world oil production fell during 1862-4 before more productive new fields were found to replace them. Thanks to discoveries in Texas and California, for example, the United States was to remain the world's biggest oil producer until the early 1970s, when production from maturing U.S. fields began what proved to be a permanent decline (see Figure 2, on the following page). That loss of U.S. production was one reason the world suddenly came to depend so much more on the volatile Middle East. Over the most recent decade, production has begun to fall significantly from mature fields in the North Sea and Mexico, and output from Saudi Arabia failed to increase. In recent assessments, (1) I conclude that stagnating global production coinciding with remarkable growth in demand from the newly industrialized economies were the most important factors in the oil price increases over 2005-8. [FIGURE 1 OMITTED] I review the history of the oil market in a new working paper. (2) Table 1, also on the following page, presents from that research the summary of the five most recent petroleum supply disruptions. In most of these episodes, the lost oil production from the affected countries was offset in part by production increases elsewhere. Boosts in production from Saudi Arabia were the most significant offsetting factor. The first four events listed were followed by economic recessions. In the paper, I note that in fact all but one of the 11 U.S. recessions since World War II were preceded by a sharp increase in the price of crude petroleum, a pattern I first noted in 1983 (3) when there were only eight postwar recessions for which the observation could be made. One mechanism by which oil shocks likely contribute to economic recessions is through the automotive sector, because consumers postpone purchases or shift spending away from larger domestically manufactured vehicles. (4) Paul Edelstein and Lutz Kilian (5) document the empirical significance of this effect, and Valerie Ramey and Dan Vine (6) demonstrate that it continues to be quite important despite changes in the American economy over time. Gasoline price increases also have been observed to have a significant depressing effect on measures of consumer sentiment. [FIGURE 2 OMITTED] In a recent paper (7) I document that automobile purchases, consumer sentiment, and overall consumer spending in 2007-8 responded to the oil price increase in much the same way as had been observed in earlier episodes. Had it not been for the decline in the auto sector alone, U.S. real GDP would have increased by 1.2 percent between 2007:Q4 and 2008:Q3, a period that was subsequently characterized by the NBER Business Cycle Dating Committee as the first year of our most recent recession. …

Journal ArticleDOI
TL;DR: In this article, the authors provided a disaggregated analysis of the causal relationship between fossil fuel consumption and real gross domestic product (GDP) in the US using annual data from 1949 to 2006.
Abstract: This empirical note provides a disaggregated analysis of the causal relationship between fossil fuel consumption and real gross domestic product (GDP) in the US using annual data from 1949 to 2006. The Toda-Yamamoto long-run causality tests reveal the absence of Granger-causality between coal consumption and real GDP; positive unidirectional causality from real GDP to natural gas consumption; and positive unidirectional causality from petroleum consumption to real GDP.