Energy intensity convergence in OECD countries

Abstract

This paper investigates the energy intensity convergence for 21 OECD countries over the period 1980-2010. To achieve this aim, fractional cointegration definition suggested by Cheung and Lai (1993), which requires only a mean reverting (d < 1) relationship between a set of 1(1) variables, is used. Following their suggestion, we employ Geweke and Porter-Hudak test for estimating the fractional parameter of the residuals obtained from cointegrating regressions. The results reveal the presence of energy intensity convergence for 9 countries namely Canada, Chile, Denmark, Finland, Germany, Iceland, Ireland, the Netherlands and Turkey.