Coal consumption and industrial production nexus in USA: Cointegration with two unknown structural breaks and causality approaches


Yildirim E., Aslan A. , Ozturk I.

RENEWABLE & SUSTAINABLE ENERGY REVIEWS, vol.16, no.8, pp.6123-6127, 2012 (Journal Indexed in SCI) identifier identifier

  • Publication Type: Article / Review
  • Volume: 16 Issue: 8
  • Publication Date: 2012
  • Doi Number: 10.1016/j.rser.2012.07.002
  • Title of Journal : RENEWABLE & SUSTAINABLE ENERGY REVIEWS
  • Page Numbers: pp.6123-6127

Abstract

The paper investigates the causality relationships among industrial production index, coal consumption and employment in industrial sector for the period of 1973:1-2011:10 in USA. After noticing that there are breaks in the regression model, the Hatemi-J test for cointegration is employed to the cases that take into account two possible regime shifts. It is concluded that there is a long run relationship between industrial production and industrial coal consumption with the breaks at 1983:4 and 1998:4. We found a negative relationship between coal consumption and industrial production for the period of 1973:1-1983:4 and positive relationship for 1983:5-1998:4 period. For the last period that covers 1983:5-2011:10, the cointegration relationship turned to negative. In addition, the results show that causal relationship between coal consumption and industrial production changes over time. (C) 2012 Elsevier Ltd. All rights reserved.