The Link between Energy Consumption and Economic Growth: Empirical Evidence for Black Sea Countries

The aim of this paper is to investigate the energy consumption-economic growth nexus for 7 Black Sea countries for the period 1990-2012. By using panel data techniques, findings show that increases in real per capita GDP have a positive and statistically significant effect on per capita energy consumption (and vice-versa). In the long term, a 1% increase in real per capita GDP increases energy consumption per capita by a value between 0.63% and 0.64% while a 1% increase in per capita energy use increases the real per capita GDP by a value between 1.02% and 1.03%. Thus, the impact of real GDP on energy consumption is less important than vice versa. All these outcomes should be taken as evidence that energy appears as a key input in the production function. Furthermore, energy saving policy and efficiency improvement appear to have both a favorable influence on the GDP growth.