The Relation Between Energy Consumption and Economic Growth in Henan Province of China

This thesis examines the relation between energy consumption and economic growth and discusses the potential for energy conservation alternatives without sacrificing economic growth in Henan Province of China. The analyses are based on time series models of the Henan Province economy. The relation of energy and economic is examined by employing a multivariate approach. The estimation result for VAR model demonstrates the primary role of energy on economic growth in Henan. The long-run relationship and bidirectional causality between energy use and economic growth is confirmed by alternative modeling frameworks, econometric methods and different energy vectors. Direct cuts in energy consumption would therefore place a negative effect on economic growth in Henan.