Energy consumption growth has recently been higher than economic growth in Taiwan, worsening energy efficiency. This article utilizes the momentum-threshold autoregressive cointegration method to examine the long-run equilibrium relationship between economic growth and energy consumption growth, particularly focusing on the most energy-consuming sectors in Taiwan. Allowing for a thresh- old effect sheds new light on the explanation of the non-linear characteristics of the energy-growth link. The results indicate that economic growth is non-linearly cointegrated with energy consumption when the asymmetric adjusting behavior is confirmed. Specifically, we find that the deviations adjust persistently toward equilibrium in a relative energy efficiency regime for the aggregate-level, while for the sector level in a relative energy inefficiency regime. The government authority should conduct effective energy demand-side management to improve energy efficiency.
|Number of pages||10|
|Journal||Energy Sources, Part B: Economics, Planning and Policy|
|State||Published - 1 Jan 2013|
- Asymmetric adjustments
- Energy efficiency
- Momentum-threshold autoregressive (M-TAR)
- Threshold cointegration