Relationships between Energy Consumption and Economic Growth Based on the Time-Varying Parameter State Space Model

In this paper,a time-varying parameter state space model is used to study the time-varying relationship of energy consumption and economic growth in Jiangsu province on the basis of energy consumption and GDP per capital since 1985.The empirical results show that there exists a long-run equilibrium relationship between energy consumption and economic growth.A time-varying model is more suitable for describing the elasticity coefficient of energy consumption from the effect of fitting and the estimate of residuals.The elasticity coefficient of energy consumption shows nonlinearities over the sample period,which is closely related to the economic policies in different periods.