The Causal Effect of Shifting Oil to Natural Gas Consumption on Current Account Balance and Economic Growth in 11 OECD Countries: Evidence from Bootstrap-corrected Panel Causality Test

摘要

Since energy is unavoidable source in production process, the rapid increase in oil price leads to several economic problems such as security of energy supply, rising foreign-dependency, increase in energy bills, current account deficit and a decrease in economic growth. Therefore countries aspire to energy diversification in energy consumption since the oil shock of 1973. In this context use of natural gas instead of oil is a policy tool. So this study examines the causal relations among the rate of natural gas consumption to oil consumption, economic growth and current account balance for 11 OECD countries (Australia, Finland, France, Germany, Greece, South Korea, Mexico, Netherland, Switzerland, United Kingdom and United States. and the period of 1980–2012. The panel data causality test developed by Konya (2006) was used since it is good enough to account for both cross-sectional dependency and heterogeneity among the countries in the sample. Furthermore the method estimated country specific critical values using bootstrap simulation. According to achieving findings, there is unidirectional causal relation from the ratio of natural gas/oil consumption to current account balance for Switzerland. A one way causal nexus was found from the ratio of natural gas/oil consumption to economic growth in the case of South Korea and Netherland. There is unidirectional causal relation from economic growth to the ratio of natural gas/oil consumption in the pattern of Switzerland. Lastly no causal nexus found from current account balance to the ratio of natural gas/oil consumption.