How Does Renewable Energy affect Economic Growth? Results of Modeling on Mixed Frequency Data
This study models the impact of renewable energy consumption on economic growth. Data on renewable energy consumption and real GDP usually have different frequency, and commonly used methods of data aggregation lead to the information loss. In order to avoid the problem, the method of temporal disaggregation was used in our paper. Further, we implemented the vector error correction model to define the type of causal relationship between variables. As a result, our analysis has indicated a positive relationship between renewable energy consumption and economic growth in the long-run period, whereas in the short-run period, economic growth has been found to cause renewable energy consumption. Therefore, the conservation hypothesis has been confirmed in our work.