Helmi, Mohamad Husam; Çatık, Abdurrahman Nazif; Bucak, Çağla; Balli, Esra; Akdeniz, Coşkun

This study examines the long-run income and price elasticities of oil demand in 21 OECD countries using quarterly data from 1980:Q1 to 2021:Q3. We find that oil demand is inelastic with respect to both income and prices at 0.117 and −0.179, respectively. The cointegration tests reveal instability in oil price elasticities over time. The time-varying panel data estimates support these findings, showing significant variations in elasticities influenced by oil market dynamics and global events. Income elasticities reached their highest levels during the COVID-19 pandemic, while price elasticities ranged from −0.396 to 0.275. Significantly, the sign of oil price elasticities shifted from negative to positive after 2015, contrary to the law of demand, probably because of declining oil prices during that period. The largest positive and statistically significant price elasticity occurred in early 2020, which can be attributed to the COVID-19-induced decline in oil prices. Overall, this analysis contributes to understanding oil demand dynamics and highlights the impact of economic and oil market factors on elasticities.

Helmi, Mohamad Husam; Çatık, Abdurrahman Nazif; Coşkun, Nuran; Ballı, Esra; Sigeze, Çiler

This study examines the convergence of renewable energy consumption in G-7 countries. We employ LM unit root and RALS version of LM unit root tests with endogenously determined with structural one or two breaks. Despite the increase in renewable energy consumption in G-7 countries, it is important to identify whether renewable energy consumption converges across these countries to formulate appropriate policies to support sustainable energy consumption and reduce CO2 emissions. Our analysis indicated that Germany, Italy, and Canada exhibit evidence of convergence. However, after employing both the LM and RALS versions of the LM unit root tests, which consider level shifts with one or two breaks or trend shifts with one or two breaks, we found that there is no evidence of convergence for France, Japan, and the United Kingdom. Overall, our results highlight the importance of formulating country-specific policies to support renewable energy consumption and reduce CO2 emissions. Policymakers need to identify the drivers of renewable energy consumption and adopt appropriate measures to ensure that the countries can meet their climate goals while also ensuring energy security.