A cointegration analysis on the relationship between energy consumption and economic growth in Hebei province of China

In order to examine the relationship between economic growth and energy consumption for Hebei province which consumed about 9% of the total energy consumed in China. Firstly, we made a cointegration analysis on the relationship between primary energy consumption and economic growth for Hebei province of China based on the corresponding data from 1993 to 2007. The results indicates that there was a stable linear cointegration relationship between these two variables. Then we constructed cointeration equation and error correction model(ECM) for these two variables. Based on the ECM constructed, we made a non-classical Granger causality test for these two variables. The results indicated that there existed both long-run and short-run single-direction Granger causality from economic growth to energy consumption. The study results also implies that the pattern of energy use in Hebei province coincide the general law of that in industrialization.