ARE ENERGY SHOCKS PERMANENT IN COUNTRIES WITH HIGH NATURAL GAS CONSUMPTION?

Abstract

This study examines whether energy shocks are permanent or temporary in the 15 countries with the highest natural gas consumption, according to the BP World Energy Statistics Report. The analysis was carried out with the help of annual data of these 15 countries between 1970-2021. The stationarity of countries' natural gas consumption was analyzed with the panel unit root test, which allows smooth transitions as well as sharp structural breaks, developed by Bahmani-Oskooee et al. (2014) with the Fourier methodology. According to econometric findings, it has been determined that natural gas consumption is not stationary in Germany, Argentina, France, Iran, Japan and Mexico. While possible energy shocks have permanent effects in these countries, energy consumption tends to return to trend in the other 9 countries of the panel. Another result obtained from the analysis shows that the overall panel has stationary properties. The study has comprehensive data on energy consumption, which is indispensable in line with the sustainable growth and development goals of the global world.