Analysis of Dynamic Relationship between Energy Consumption and Economic Growth Based on PVAR Model

Abstract

In order to analyze the relationship between energy consumption and economic growth dynamics, the author proposes a dynamic analysis technology of energy consumption and economic growth based on the PVAR model. This technology uses the PVAR method to compare and quantitatively describe the relationship between economic growth and energy consumption in developed and developing countries from 1990 to 2009, using impulse response functions and variance decomposition analysis methods; study the similarities and differences between total energy consumption and various fossil energy consumption and the dynamic impact of economic development, and finally establish a PVAR model for analysis. Experimental results show that: in the forecast of variance analysis, the impact explanatory power of the total energy consumption of developing countries on the fluctuation of economic growth reaches 8.85070. However, the contribution of total energy consumption in developed countries to economic growth is insufficient. The explanatory power of economic growth in developed countries to total energy consumption is 15.58070, while that in developing country is 29.28070, both of which are greater than the explanatory power of their respective total energy consumption on economic growth. Conclusion. The technology based on the PVAR model can effectively meet the needs of analyzing the dynamic relationship between energy consumption and economic growth.