Nonlinear Relationship between Economic Growth, Energy Price and Renewable Energy:The threshold regression approach

• Main Authors: Mohsen Mohammadi Khyareh, Ali Karshenasan
• Format: Article
• Language: fas
• Published: Iranian Society of Heating, Refrigeration and Air Conditioning Engineers (IRSHRAE) 2018-02-01
• Series: انرژی‌های تجدیدپذیر و نو
• Subjects: threshold effect; renewable energy; economic growth; iran
• Online Access: http://www.jrenew.ir/article_59905_575432144716da467c8c2f856efbd3e6.pdf

In this paper, using the threshold regression approach, the impact of energy prices on the development of renewable energy in different regimes of Iran's economic growth rate is examined. Experimental data from the Central Bank of Iran site was collected during the period (1360-1993). The results showed that there is a threshold in the regression relation, which equals 7.74% in annual rates of GDP growth. Based on the threshold value, the observations were divided into two regimes with low economic growth (economic growth below 7.74%) and high economic growth (economic growth above 7.74%). The findings show that there is a negative and significant relationship between the consumer price index and the share of renewable energy in the country during high economic growth. This can be due to unsustainable and cross-sectional economics, as well as a lack of proper management of resources due to increased energy-related revenues and subsidized energy, as well as the private sector's reluctance to use renewable energy with cheap fossil energy. Also, in Iran, in times of low economic growth, there is a negative relationship between economic growth and the share of renewable energies.