TY - JOUR
T1 - Disaggregated energy consumption and GDP in Taiwan
T2 - A threshold co-integration analysis
AU - Hu, Jin-Li
AU - Lin, Cheng Hsun
PY - 2008/9/1
Y1 - 2008/9/1
N2 - Energy consumption growth is much higher than economic growth for Taiwan in recent years, worsening its energy efficiency. This paper provides a solid explanation by examining the equilibrium relationship between GDP and disaggregated energy consumption under a non-linear framework. The threshold co-integration test developed with asymmetric dynamic adjusting processes proposed by Hansen and Seo [Hansen, B.E., Seo, B., 2002. Testing for two-regime threshold cointegration in vector error-correction models. Journal of Econometrics 110, 293-318.] is applied. Non-linear co-integrations between GDP and disaggregated energy consumptions are confirmed except for oil consumption. The two-regime vector error-correction models (VECM) show that the adjustment process of energy consumption toward equilibrium is highly persistent when an appropriately threshold is reached. There is mean-reverting behavior when the threshold is reached, making aggregate and disaggregated energy consumptions grow faster than GDP in Taiwan.
AB - Energy consumption growth is much higher than economic growth for Taiwan in recent years, worsening its energy efficiency. This paper provides a solid explanation by examining the equilibrium relationship between GDP and disaggregated energy consumption under a non-linear framework. The threshold co-integration test developed with asymmetric dynamic adjusting processes proposed by Hansen and Seo [Hansen, B.E., Seo, B., 2002. Testing for two-regime threshold cointegration in vector error-correction models. Journal of Econometrics 110, 293-318.] is applied. Non-linear co-integrations between GDP and disaggregated energy consumptions are confirmed except for oil consumption. The two-regime vector error-correction models (VECM) show that the adjustment process of energy consumption toward equilibrium is highly persistent when an appropriately threshold is reached. There is mean-reverting behavior when the threshold is reached, making aggregate and disaggregated energy consumptions grow faster than GDP in Taiwan.
KW - Asymmetric adjustment
KW - Disaggregated energy consumption
KW - GDP
KW - Threshold co-integration
UR - http://www.scopus.com/inward/record.url?scp=48049107329&partnerID=8YFLogxK
U2 - 10.1016/j.eneco.2007.11.007
DO - 10.1016/j.eneco.2007.11.007
M3 - Article
AN - SCOPUS:48049107329
VL - 30
SP - 2342
EP - 2358
JO - Energy Economics
JF - Energy Economics
SN - 0140-9883
IS - 5
ER -