Review of economic growth and energy consumption: A panel cointegration analysis for EU countries

This paper examines the long-run relationship between energy consumption and real GDP, including fixed capital and total employment, for 18 EU countries from 1995 to 2012. The analysis was based on the panel unit root tests, panel cointegration test and fully modified ordinary least squares (FMOLS) estimator and dynamic ordinary least squares (DOLS) estimator. Data were analyzed in three groups – all sample, Visegrad countries (V4) and old 14 EU countries. Indeed, the results demonstrate that economic growth and the variables – energy consumption, gross fixed capital – are cointegrated for the whole panel of countries as well as for the two selected groups of countries. Furthermore, the panel FMOLS and DOLS estimators reveal that the relationship between energy consumption, gross fixed capital and economic growth is positive.