DISAGGREGATED APPROACH TO ENERGY-GROWTH NEXUS: MICRO-REGIONAL VIEW

We explore the relationship between economic growth and energy consumption using regional level data over the 2004-2014 period. The data on energy consumption for regions cannot be used with the economic data on counties/regions since the borders of the regional energy distributional areas do not correspond to administrative borders. We use a proprietary data set of energy consumption for Croatian counties which allows us to revisit the energy-growth nexus dilemma from a disaggregated point. We find significant policy implications stemming from comovement between the counties and long term positive influence of energy, capital and labor on industrial output.