The Relationship between Renewable Energy Consumption and Economic Growth in Azerbaijan

Abstract

This article examines the causal relationship between renewable energy consumption (REC) and economic growth (EG) in the case of Azerbaijan using annual data from 1992 to 2015. The Toda-Yamamoto causality test framework of vector autoregressive model is utilized to test the causal relationship between the variables. The results of this test reveal that there is unidirectional causality running from EG to REC. The study’s findings might be a helpful tool for Azerbaijani policymakers and oil-rich economies to make renewable energy-related policy decisions.