Causal Relationship between Energy Consumption and Economic Growth in Shanghai: the Case of 1978∼2007

Economic development and energy consumption depend upon each other; therefore it is necessary to thoroughly explore their relationships. Using data for the period 1978 similar to 2007 of Shanghai, We investigate this issue by cointegration Analysis and Grange causal test. The empirical results show: a) There is a long-term equilibrium relationship between GDP and EC of Shanghai, so do the relationship in first and third industry. b) Respectively, there is no causality between GDP and EC, the third industry and EC3; there is a unilateral relationship from first industry to EC1 and a unilateral relationship from EC2 to second industry.