Abstract:
The relationship between energy consumption and economic growth in the economic zone of Yangtze River Delta, Pearl River Delta and Western Taiwan Straits in 1986-2009 is analyzed in this paper. The results obtained by using cointegration theory and error correction model show that no linear cointegration relationship exists between energy consumption and real GDP in any of the three regions. However, in considering the case of structural breaks, cointegration relationship between variables can be found in economic zone of Yangtze River Delta, Pearl River Delta, but not in economic zone of Western Taiwan Straits. The results obtained by using Granger causality analysis show that there is twoway Granger causality between energy consumption and real GDP in economic zone of Yangtze River Delta. The implementation of energy conservation policy will affect economic growth in this region. In the economic zone of Pearl River Delta, there exists only oneway Granger causality from real GDP to energy consumption. And the implementation of energy conservation policy will not affect economic growth in this region.