Long-run relationship between energy and economic development in Asia: a co-integration analysis*

This paper examines the long-run relationship between energy and economic development. The study also provides policy imperatives for better energy policy and economic development. The time series data from 1981 to 2010 for selected countries of Asia has been used for analysis. Johansen co-integration technique has been used for analysis of long-run stable relationship. It has been found from the study that in India, there is long-run stable relationship between energy supply and GNP, also between energy per-capita consumption and per-capita income. In Korea, relationship found between energy production and GDP. In Japan, per-capita income has long-run relationship with energy supply and per-capita energy consumption. However, energy production not has long-run relationship with economic development in India and Japan, and energy supply not has long-run relationship with economic development in Korea. Therefore, the study suggests to redesigning of energy policy for better economic development of Asia.