Cointegration Analysis of Economic Growth and Energy Consumption in China

The relationship of economic growth and energy consumption is one of hot issues in the research of energy field.In this paper,we used the methods of cointegration analysis and Granger causality estimation to test the relationship between China's GDP and total energy consumption(including coal,oil,gas and power) based on the data of 1953～2006.All the empirical study experienced several steps including unit root test,cointegration test,error correction model as well as Granger causality estimation.The result shows that GDP the cointegration model exists in and total energy consumption and coal,oil,gas and power consumption,thus we establish the error correction model on them.This paper also shows that total energy consumption,coal and gas consumption are the two-way Granger causality of GDP,which alert us that,when making energy policies,China must consider the likely impacts to its economic growth.