The Application Of PVAR Model In The Research Of The Relationship Between Economic Growth And Energy Consumption

Energy is indispensable means of livelihood and production for human existence and evolvement, which plays a significant role in the national economy. Reasonable energy utilization is an important guarantee for sound and steady development of economy. Since the reform and open policy, our country’s energy consumption has been increasing. Especially from2002to2004, the increase rate of energy consumption is15.28%,16.14%and10.56%separately. Given the imbalance of economical development among provinces in our country, how to accurately recognize the relationship between energy consumption and economic growth has become the major issue to study at present. That because a correct understanding of the relationship between economic development and energy consumption is good for China’s macroeconomic regulation, structural adjustment of energy consumption, energy exploitation, import and security.By introducing the theory of hypothesis testing in the econometrics as well as probability and mathematical statistics, the paper discussed the evolution, principle, estimation method and technology of panel data vector auto-regression (PVAR) model, and analyzed it’s applicable objects especially. On this basis, taking the relationship between economic development and energy consumption as research object, adopting literature research, model establishment and empirical analysis, the paper emphatically analyzed the mutual impact between economic development and energy consumption of29provinces in China from1997to2009. In general, the paper analyzed from the following four aspects. Firstly, it reviewed the evolution, principle, estimation method and technology of PVAR mode systematically; secondly, it analyzed the regional differences of economic development and energy consumption; thirdly, it developed a static panel data model to analyze the relationship between economic development and energy consumption. Fourthly, it set up the PVAR model to analyze dynamically the mutual explaining degree and the interaction force between economic development and energy consumption. In addition, the paper pointed out several problems when the scholars in our country used the model and put forward the ways to solve these problems through reviewing the model.Empirical study result shows that the interaction between economic development and energy consumption conveys fairly positive tendency. And it is distinct for different regions. Due to the different economic structure and developing status of separate provinces, the interaction has complex spatial distribution characteristics. The empirical results show that the interaction force between economic development and energy consumption is uncoordinated. The consumption and shortage of single energy like electricity, diesel and gasoline has little influence on economic growth, whereas total energy consumption exerts a remarkable influence. This is different from the former scholars’ studies.