VAR-Based Research on Energy Consumption in China

This paper adopted Vector Auto-regression (VAR) Model to carry out a research on the energy consumption in China during 1983-2009. Cointegration Test, Impulse Response Function and Variance Decomposition are used to analyze the effect of total energy production, economic growth and improved living standards on China´s energy consumption. It shows that there is a long-term equilibrium relationship between China´s energy consumption, total energy production, economic growth and improved living standards. Dynamic analysis of Impulse Response Function and Variance Decomposition shows the effect of the impact and influence degree on energy consumption.