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In this paper, continuous wavelet decompositions regarding the notions of coherence and phase are used to analyze the time-frequency dynamics of the existing relationships between energy supply and economic growth for a group of European countries. The objective is to identify both the intensity and the direction of the relationship over time and across frequencies. We also study the existence of a debt channel implying an indirect relationship between energy and growth. Our results show the complexity of the energy supply-growth relationship composed by direct effect at the short run and indirect effects through debt channel at the mid and long run. The countries with the highest debt/GDP ratio are more subject to such direct and indirect effects than others where only short run direct effect is noted.
Awada et al. (Sun,) studied this question.