Abstract:

This study analyzes the relationship of causality between energy consumption, trade openness and economic growth for 24 OECD countries. In the study undertaken during 1971 to 2014, the cross section dependency and the homogeneity of slope coefficients were investigated. After determining the heterogeneity of the slope coefficients under the cross section dependency of the Konya (2006) causality test, it was analyzed against four different stages. i) The panel causality relationship between economic growth and energy consumption. ii) The panel causality relationship between economic growth and trade openness.  iii) The panel causality relationship between energy consumption and outward openness. iv) According to the results of panel causality analysis between energy consumption and trade openness to economic growth, it was found that unidirectional causality relationship between energy consumption and trade openness to economic growth in Canada, Chile, Iceland, Spain and Sweden.

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