Considering the short- and long run relationship between the variables of employment, coal consumption, capital and economic growth in Iran

Document Type : پژوهشی

Author

Mehdi Behname

https://doi.org/10.22067/pm.v19i4.29319

Abstract

Nevertheless, the extraction and consumption of coal aren’t comfortable as well as oil and gas but according to increasing oil and gas prices we can do a study for the ability of substitution of oil, gas and coal.
This paper investigates the causal relationship between coal consumption, GDP, capital information and unemployment in Iran for the period 1350 -1386. We apply KPSS unit root test for surveying of stationarity of the variables. This test shows the variables are stationary at the first difference. Since, the variables are I(1) we apply Johanson (1988) co-integration test for studying of long run relationship between the variables.
CUMUSUM and CUMUSUMSQ tests show that the variables are state. The Granger causality test shows a bi-directional causality between capital information and GDP, it means economic growth and capital information strengthens each other in long and short run. Capital increasing lead to unemployment augmentation. On the other hand, coal consumption isn't cause of economic growth; but the inverse is true.

Keywords

Coal consumption

Economic Growth

Capital

employment

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