DOI: 10.30586/pek.1657353 ISSN: 2587-2567

The Effect of Leading Macroeconomic Indicators on Energy Consumption: The Case of Turkey

Tuğçe Okuldaş İlikçi, Seda Başar Yılmaz
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Energy consumption is of significant macroeconomic importance. Studies have shown that energy consumption influences macroeconomic indicators, and conversely, macroeconomic indicators affect energy consumption. This study deviates from the general trend in the literature by examining the impact of macroeconomic indicators on energy consumption. The macroeconomic indicators chosen for analysis include Gross Domestic Product (GDP), imports, exports, and foreign direct investments. Using Türkiye's annual data between 1970 and 2022, cointegration and causality relationships were examined by establishing two separate models. The findings revealed that both models exhibited cointegration relationships, and it was observed that the country's GDP negatively influences both fossil energy and renewable energy consumption. This suggests an improvement in energy efficiency for fossil fuel consumption and a shift towards an energy-saving production structure, while also indicating that production still heavily relies on fossil fuels for renewable energy consumption. Additionally, it was discovered that renewable energy consumption has bidirectional causality relationships with GDP, exports, and foreign direct investments. Furthermore, a unidirectional causality relationship was identified between exports and energy consumption. However, bidirectional causality was observed between exports and fossil energy consumption, and a unidirectional causality was noted from fossil energy consumption to foreign direct investments.

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