Volume 8, Issue 3 (10-2018)                   JEM 2018, 8(3): 14-27 | Back to browse issues page

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mozaffari Z, motafakker azad M A. The Relationship between Power Consumption and Business Cycle in Iran with an Emphasis on the Industrial Sectors. JEM. 2018; 8 (3) :14-27
URL: http://energy.kashanu.ac.ir/article-1-738-en.html
university of tabriz
The purpose of this study is to evaluate electricity consumption over the business cycles of industrial production of Iran from1967 to 2013. In this paper, the existence of co-integration between electricity consumption and industrial production is checked using ARDL approach; furthermore, causal relationship between electricity consumption and industrial production is investigated. The findings have demonstrated a dual causality between electricity consumption and industrial production. Moreover, trend cycle components of industrial production and of power consumption are separated using Hedrick - Prescott (HP) filters. Assessment of the causality between components of trend variable and cycle variable shows a long-term relationship. Results have indicated that in 2011 the industrial sector has the highest and in 2013 the lowest value-added. Despite the periods of sharp downturn in the industrial sector, during this periods, the power consumption is not reduced accordingly and even in some periods electricity consumption has been high; this situation can be explained by the low price levels and corporation’s ignorance of energy costs in production sectors.  However, after the approval of law of optimization of subsides, some industrial sectors had to reduced their electricity consumption.
Type of Study: Research | Subject: management

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