COINTEGRATION TESTS OF ENERGY-CONSUMPTION, INCOME, AND EMPLOYMENT

A recently developed methodology of the cointegration test is employed to determine whether energy consumption has a long-run equilibrium 'relationship with the level of income or employment. It is found that the long-run equilibrium relationship fails to exist in either case. The finding implies a long-run neutrality of energy consumption, which is consistent with the short-run neutrality found in the literature. The results are further confirmed by splitting the sample into two sub-periods.