Econometric perspective of the energy consumption and economic growth relation in European Union

This paper's aim is to examine the relationship between energy consumption by fuel end economic growth in a comparative analysis for Spain, Romania and European Union. Applying a methodology in three steps on data for the 1990–2010 period, long-run and short-run relationships are revealed. On long-run, the energy consumption with total petroleum products source yields evidence of linkage with economic growth (proxied by Gross Domestic Product per capita in constant prices) for both two states and European Union. Furthermore, on short run only two relationships were emphasized both sustaining the growth hypothesis. So, in Romania, renewable energy consumption influences on short run the economic performance of activities; the relation is unidirectional and is not valid in the other direction, meaning that economic growth does not cause renewable energy consumption. In Spain, energy consumption with source natural gas causes economic growth on short-run, and the relation is valid just in this direction. The findings of this study help understanding the energy-growth nexus which stands behind all energy policies.