Reza Ghaderi Moghaddam; Bijan Baseri; Nemat Falihi; Gholamreza Abbasi
Abstract
Energy plays a vital role in production and consumption of variouse activities. In Iran energy affect economic growth as an important input along with other production inputs and increase value added of industrial activities and services in nationalwide. In this study, we will test the asymmetric analysis ...
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Energy plays a vital role in production and consumption of variouse activities. In Iran energy affect economic growth as an important input along with other production inputs and increase value added of industrial activities and services in nationalwide. In this study, we will test the asymmetric analysis of the effect of energy consumption on economic growth with emphasis on financial development using the ARDL method. Based on a nonlinear and asymmetric relationship between energy consumption, financial development and economic growth, we found the nonlinear relationship of variables examine the period 1981-2020. So two different indicators were used for the examination of financial development variable (domestic credit to private sector to GDP and private sector liquidity to GDP).The results show an asymmetries relationship between economic growth, energy consumption and financial development.In the long run and short run, the positive shock of energy consumption and financial development has slowed down economic growth. Positive energy consumption shockleads to producers' efforts to reduce energy consumption and reduce economic growth in the short run. Also, any positive shock to financial development reduces economic growth in Iran. This reduces consumption and access to finance, and ultimately reduces investment activities
