Investigation of Causality between Energy Consumption and Growth Economic In the Transportation Sector of Iran

The increasing dependency of societies to energy due to the replacement of machines instead of human capital has made energy as an important factor of economic growth and it plays a considerable role in economic sectors operation. This paper examines the relationship between energy consumption and Growth Economic In the transportation sector of Iran for 1968-2008 using unit root tests, Granger causality. Also Hesiao method which is based on minimum final prediction error (FPE) has been used to determine the optimal lags of variables. The results of unit root tests show that both variables are stationary in levels. We find that energy consumption Granger is not causality Growth Economic also Growth Economic Granger is causality energy consumption In the transportation sector of Iran.