Journal of Energy Engineering (에너지공학)

The Korean Society for Energy (한국에너지학회)
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Oil consumption and economic growth: A panel data analysis

  • Lim, Kyoung-Min (Industrial Technology Policy Center, Korea Institute for Advancement of Technology) ;
  • Lim, Seul-Ye (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology) ;
  • Yoo, Seung-Hoon (Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology)
  • Received : 2014.05.26
  • Accepted : 2014.09.12
  • Published : 2014.09.30
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Abstract

Oil is obviously vital for economic growth and industry development. This paper attempts to explore whether or not there is a inverted-U relationship between oil consumption and economic growth. To this end, we employ a panel data analysis with fixed effect or random effect models using the set of data from 61 countries for the year 1990-2008. In conclusion, a statistically significant inverted-U relationship between per capita consumption of oil and per capita GDP is found. However, the level of per capita GDP at the peak point of per capita oil consumption is estimated to be 65,072 in 2005 international constant dollars, which is much larger than economic scales of sampled countries. Thus, as per capita GDP grows, per capita oil consumption is predicted to increase until eventually reaching the peak.

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