A Study of Causality Relationship between Energy Carrier’s Consumption and Value-Added of Industrial Sector in Iran during the Period 1967-2006

Fotros, Mohammad Hassan; Mansoori, Hamed

doi:10.22055/jqe.2009.10698

A Study of Causality Relationship between Energy Carrier’s Consumption and Value-Added of Industrial Sector in Iran during the Period 1967-2006

https://doi.org/10.22055/jqe.2009.10698

Volume 6, Issue 22 - Serial Number 3
Autumn 2009

Pages 27-53

Quarterly Journal of Quantitative Economics (JQE)

Authors

Mohammad Hassan Fotros

Hamed Mansoori

Abstract

Energy is one of the key factors of production. The growth of industrial production is accompanied with increases in the demand for energy. More Efficient use of energy is of great importance for any system of production. This paper entertains a Granger causality test between energy consumption and the value-added of Iranian industries during 1967-2006 by using Toda-Yamamoto method. The results indicate that there is (a) a bi-directional causality relationship Between industries’ industries Value- Added and electricity consumption , (b) and uni-directional causality relationship from industries’value-added to natural gas and other petroleum products. Consequently, it is possible to pursue a reduction policy in petroleum use without any prejudice to industrial production.

Keywords

Industrial value-Added

energy carrier’s

Toda-yamamoto

Iran

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