The relationship between energy and economic growth: Empirical evidence from 66 countries

In this study, we use dynamic panel data models to examine the impact of electricity and non-electricity variables on economic growth for a global panel consisting of 66 countries. The time component of our dataset is 1986–2005 inclusive. We also estimate this relationship for four regional panels; namely, East/South Asian and the Pacific region, Europe and Central Asian region, Latin America and Caribbean region, and Sub-Saharan, North Africa and Middle Eastern region. In total, we use six proxies for energy. The empirical analysis is based on a sound theoretical framework, in that we draw on growth theory and augment the classical growth model, which consists of inflation, capital stock, labour force and trade, with energy. Generally, the results on the impact of energy are mixed.