A Survey of the Causality Relation between Energy Consumption and Economic Growth in Iran

The study of the reasons of economic growth is of great importance and it is always considered by many economists. Improving life quality of people and increasing public welfare are the goals of various governments in the world and economic growth is one of the important factors in achieving these goals. Thus, searching about the factors effective on economic growth is of great importance. The present study evaluated the relationship between energy consumption and economic growth in Iran and time series data were used during 2009-1971. To estimate model, vector error correction model (VECM) is used. The results showed that there is a two-way causal short-term and long-term relationship between energy consumption and economic growth.