The Relationship Between Exchange Rate and Renewable Energy Consumption in EU Economies: A Panel Bootstrap Causality Analysis

Merve Güngör Parlakyiğit; Eda Dineri

Article Details

The Relationship Between Exchange Rate and Renewable Energy Consumption in EU Economies: A Panel Bootstrap Causality Analysis

Authors:

Merve Güngör Parlakyiğit | Eda Dineri

Publisher:

Siirt University

Main Topics:

Makro İktisat (Diğer)

Journal:

Siirt Sosyal Araştırmalar Dergisi Vol.4 Issue 1, pp.18-33

Document Type:

Article

Publication Date:

6/2025

Document Language:

Turkish

Document ID (Org No.):

2001352924

pISSN:

3062-0295

Keywords:

Abstract:

 In addition to frequently discussed economic problems such as fluctuations in energy costs and elimination of exchange rate fluctuations, there are also recent environmental problems such as global warming and climate change, and one of the policy recommendations that can be implemented to eliminate these problems is to increase the use of renewable energy sources. Within this context, the present study aims to investigate the interaction between renewable energy consumption and exchange rates. Furthermore, the analysis incorporates key economic determinants of exchange rates, namely the inflation rate and gross domestic product GDP. This study aims to analyze the causal relationships between the exchange rate, renewable energy, inflation rate, and GDP in fifteen EU countries over the period 19952020, using the Panel Bootstrap Causality Analysis developed by Kónya 2006. The empirical findings reveal a bidirectional Granger causality between renewable energy consumption and exchange rates at the panel level for the selected EU countries. Additionally, the results indicate a unidirectional Granger causality from GDP to exchange rates, while no causal relationship is found between inflation and exchange rates. At the individual country level, the direction and significance of causality relationships vary, reflecting country-specific dynamics. These results suggest that the green transformation initiatives pursued by EU countriesparticularly under the European Green Deal and the REPowerEU planmay also contribute to enhancing exchange rate stability through increased reliance on renewable energy.

 In addition to frequently discussed economic problems such as fluctuations in energy costs and elimination of exchange rate fluctuations, there are also recent environmental problems such as global warming and climate change, and one of the policy recommendations that can be implemented to eliminate these problems is to increase the use of renewable energy sources. Within this context, the present study aims to investigate the interaction between renewable energy consumption and exchange rates. Furthermore, the analysis incorporates key economic determinants of exchange rates, namely the inflation rate and gross domestic product GDP. This study aims to analyze the causal relationships between the exchange rate, renewable energy, inflation rate, and GDP in fifteen EU countries over the period 19952020, using the Panel Bootstrap Causality Analysis developed by Kónya 2006. The empirical findings reveal a bidirectional Granger causality between renewable energy consumption and exchange rates at the panel level for the selected EU countries. Additionally, the results indicate a unidirectional Granger causality from GDP to exchange rates, while no causal relationship is found between inflation and exchange rates. At the individual country level, the direction and significance of causality relationships vary, reflecting country-specific dynamics. These results suggest that the green transformation initiatives pursued by EU countriesparticularly under the European Green Deal and the REPowerEU planmay also contribute to enhancing exchange rate stability through increased reliance on renewable energy.

 In addition to frequently discussed economic problems such as fluctuations in energy costs and elimination of exchange rate fluctuations, there are also recent environmental problems such as global warming and climate change, and one of the policy recommendations that can be implemented to eliminate these problems is to increase the use of renewable energy sources. Within this context, the present study aims to investigate the interaction between renewable energy consumption and exchange rates. Furthermore, the analysis incorporates key economic determinants of exchange rates, namely the inflation rate and gross domestic product GDP. This study aims to analyze the causal relationships between the exchange rate, renewable energy, inflation rate, and GDP in fifteen EU countries over the period 19952020, using the Panel Bootstrap Causality Analysis developed by Kónya 2006. The empirical findings reveal a bidirectional Granger causality between renewable energy consumption and exchange rates at the panel level for the selected EU countries. Additionally, the results indicate a unidirectional Granger causality from GDP to exchange rates, while no causal relationship is found between inflation and exchange rates. At the individual country level, the direction and significance of causality relationships vary, reflecting country-specific dynamics. These results suggest that the green transformation initiatives pursued by EU countriesparticularly under the European Green Deal and the REPowerEU planmay also contribute to enhancing exchange rate stability through increased reliance on renewable energy.

 Enerji maliyetlerindeki dalgalanmalar ve döviz kuru oynaklıklarının giderilmesi gibi sık gündeme gelen ekonomik sorunların yanı sıra son dönemlerde küresel ısınma ve iklim değişikliği gibi çevresel sorunlar ve bu sorunları ortadan kaldırmak için uygulanabilecek politika önerilerinden biri olan yenilenebilir enerji kaynaklarının kullanımının artırılması yer almaktadır. Bu bağlamda yenilenebilir enerji ile döviz kuru etkileşiminin araştırılması hedeflenmektedir. Aynı zamanda döviz kurunun ekonomik belirleyicilerinden olan enflasyon oranı ve GSYH ile etkileşimi de analize dahil edilmektedir. On beş AB ülkesinde 1995-2020 dönemini kapsayan bu çalışmada Kónya 2006 tarafından önerilen Panel Bootstrap Nedensellik Analizi yardımıyla döviz kuru, yenilenebilir enerji, enflasyon oranı ve GSYH arasındaki nedensel bağları analiz etmek bu çalışmanın amacıdır. Çalışmadan elde edilen bulgular doğrultusunda model bazında onbeş AB ülkesi için yenilenebilir enerji tüketimi ve döviz kuru arasında çift yönlü bir Granger nedensellik ilişkisi mevcuttur. Aynı zamanda GSYHden döviz kuruna doğru tek yönlü bir Granger nedensellik gözlemlenmiştir. Enflasyon ve döviz kuru arasında ise herhangi bir nedensel ilişkiye rastlanmamıştır. Ülke bazında elde edilen nedensellik ilişkileri ise nedenselliğin yönü ve anlamlılığı bakımından ülkeler arasında farklılık göstermektedir. Elde edilen analiz sonucuna göre AB ülkelerinin yenilenebilir enerji politikalarını Avrupa Yeşil Mutabakatı kapsamında ve REPowerEU planını dikkate alarak yenilenebilir enerji temelli attıkları yeşil dönüşüm adımları aynı zamanda bu ülkelerdeki döviz kuru istikrarına katkı sağlayacağı düşünülmektedir.

Article Details

The Relationship Between Exchange Rate and Renewable Energy Consumption in EU Economies: A Panel Bootstrap Causality Analysis

Authors:

Merve Güngör Parlakyiğit | Eda Dineri

Publisher:

Siirt University

Main Topics:

Makro İktisat (Diğer)

Journal:

Siirt Sosyal Araştırmalar Dergisi Vol.4 Issue 1, pp.18-33

Document Type:

Article

Publication Date:

6/2025

Document Language:

Turkish

Document ID (Org No.):

2001352924

pISSN:

3062-0295

Exchange Rate

Renewable Energy

Economic Growth

Inflation

Panel Data AnalysisDöviz Kuru

Yenilenebilir Enerji

Enflasyon

Ekonomik Büyüme

Panel Veri Analizi.

Issues

Article Details

Authors: Merve Güngör Parlakyiğit | Eda Dineri

Publisher: Siirt University

Main Topics: Makro İktisat (Diğer)

Journal: Siirt Sosyal Araştırmalar Dergisi Vol.4 Issue 1, pp.18-33

Document Type: Article

Publication Date: 6/2025

Document Language: Turkish

Document ID (Org No.): 2001352924

pISSN: 3062-0295

Issues

Authors:

Merve Güngör Parlakyiğit | Eda Dineri

Publisher:

Siirt University

Main Topics:

Makro İktisat (Diğer)

Journal:

Siirt Sosyal Araştırmalar Dergisi Vol.4 Issue 1, pp.18-33

Document Type:

Article

Publication Date:

6/2025

Document Language:

Turkish

Document ID (Org No.):

2001352924

pISSN:

3062-0295