Abstract:

Consumption of electricity has been known in many countries to be correlated with economic activities. The reasons for increase of electricity demand are higher living standards and industrialization. Like in other developing countries, in Turkey, the demand for energy and electricity is growing rapidly due to social and economic developments and increase of the population of the country. In this paper, the Granger causality between electricity consumption EC and Gross National Product GNP is examined for Turkey using annual data covering the period 1970-2004. As economic growth and electricity consumption variables used in empirical analysis have same order of integration I 1 , Granger causality test is employed. In this study it was found that bidirectional causal relationship between electricity consumption and GNP in the short-run, and unidirectional causality running from GNP to electricity consumption exists in the long-run.

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