Examination of Relationship between Energy Consumption and Iran’s Provinces Gross Product Using Wavelet Analysis with Panel Data

This study examines the correlation and causal relationship between energy carriers' consumption and Iran’s provinces' gross product for the period 1988-2017 using wavelet analysis with panel data and the Dumitrescu-Hurlin causality test. The results of correlation analysis show that the correlation pattern between energy consumption and GDP, in different energy carriers, is different. The correlation between natural gas, gasoline, kerosene, and electricity with GDP is strong at all energy intensity levels. The correlation between furnace oil and GDP is reported to be low and weak for all provinces in the long run. Furthermore, the findings show that in provinces with high energy consumption intensity, consumption of gasoline, fuel oil and total energy have led to GDP in the short run. In high-intensity cases, consumption of kerosene, gas oil, fuel oil and natural gas, in medium intensity all types of energy, and in low intensity, consumption of kerosene, furnace oil and gasoline have led to GDP. In provinces with very low energy consumption, energy carriers' consumption has not led to GDP while in the medium and long term, the feedback hypothesis is proven