Grey relational analysis between energy consumption and economic growth

The relationship between energy consumption (EC) and economic growth is a well-known and more studied subject in literature. In this study, Turkey's EC and gross domestic product (GDP) relation is analyzed. The aim of this study is to find out the relative importance of energy components on GDP for Turkey. Hence, the authors can make some strategic implications up to the importance of energy components on GDP.

In this study, two methods are used to find out the importance of energy types on economic growth for Turkey. First, grey relational analysis (GRA) is used to determine the most influential energy types on GDP. Then regression analysis is used to compare outcomes which are yielded by GRA.

The analyses of the results show that the most important energy sources are oil and renewables for Turkey. Both energy sources have equal importance with economic growth. However, it is implied that this balance should be destabilized for the sake of renewable production and usage to have less carbon footprint.

There are many econometric models used for defining EC and economic growth causality. But the authors could not come across any study which investigates relationship between economic growth and EC by GRA. The method that is newly used for this subject and applying analysis for a developing country is the importance of this study.