Reinvestigation of Relationship Between Macroeconomic indexes and Energy Consumption in Iran

Abstract

In this paper attempted to investigation the relationship between energy consumption in economic sectors and macroeconomic indexes of Iran for 1970-2000 by using vector error correction model (VECM). Result showed that a long run relationship existence between total energy consumption, price index and gross national product. With respect to results stabilization energy price policy in economical growth conditions will encourage energy demand dimension. So, government must change energy price policy towards variable pricing based on amount of consumption especially in peak and load duration