Economic Growth and Energy Consumption: A Comparison of Developing and Developed Countries during the Period of 1970-2008

This study investigates the relationship between energy consumption and economic growth in a panel of 75 selected developed and developing countries from 1970 to 2008. To that end, different panel unit root tests, panel cointegration and pooled least square are used. Results indicate the existence of Co integration relationship between economic growth and energy consumption in the long run both in developed and in developing countries. However, the co integrating vectors are not the same. Also, in the period of investigation, the developed countries have had a higher level of energy consumption than developing countries; but the long run effects of energy consumption on economic growth in developing countries have been greater than that in developed countries.