Cointegration Analysis with Variable Structure of China's Coal Consumption and Economic Growth

The relationship between energy consumption and economic growth has been a well-studied topic in the area of economic research. Based on the theory of structural breaks, we analyze the data generating process of coal consumption and economic growth in China, verify, that the time series data is generated by the unit root process, find the mean structural breakpoints and trend structural breakpoints, and reveal that there is strong correlation between the occurrence of breakpoints and the changes of the political and economic situation of the nation in the sample period In this paper, on the basis of structural break analysis, we also use structural break cointegration theory to construct a cointegration model with variable structure. This model reflects the long-term equilibrium relationship between coal consumption and economic growth. The empirical result shows that this model has strong practical forecast performance.