The contribution of nuclear energy to economic growth in France: short and long run

The recent nuclear accident of Fukushima has made a number of countries, such as France reconsider nuclear energy as an option. This article investigates the dynamic links between economic growth and nuclear energy production in France. In order to test for Granger causality, includes variance decompositions and impulse responses in the presence of co-integration among the variables, a vector error correction model is used to analyze the quarterly series from 1990:1 to 2011:4. Our results indicate that there is a bidirectional causality between nuclear energy and economic growth. The results show a big interdependence between nuclear energy and the French energetic system. In fact, nuclear energy generation has an important role in increasing the GDP growth. Therefore, based on the obtained results, it is important for France to increase its investment in nuclear energy projects to boost its share of total energy use since it increases GDP growth. The present study may guide policymakers in formulating energy policies for green economic and sustainable development in France.