Work detail

Analysis of Energy Economy to drive Ukraine’s economic growth

Author: Mgr. Viktoriia Kariagina
Year: 2017 - summer
Leaders: doc. PhDr. Ing. Ing. Petr Jakubík Ph.D. Ph.D.
Consultants:
Work type: Economic Theory
Masters
Language: English
Pages: 77
Awards and prizes:
Link:
Abstract: This thesis investigates the relationship between energy consumption and economic growth in 15 postSoviet
states with a primary focus on Ukraine over the time period 1991-2013. First, panel unit root
tests are applied to the time series for energy use and GDP for each post-Soviet country, then
cointegration tests are run to identify the relationship between the variables. The empirical strategy of
the panel data analysis is based on a neoclassical growth model specification, which includes the gross
capital formation and total labor force of each country as additional explanatory variables for
economic growth, along with energy inefficiency, % fossil fuel use, liberalization of the energy sector,
and several other variables. The dataset is analyzed using Pooled OLS, Fixed Effects and Random
Effects models, with Fixed Effects being identified as the optimal estimator. The results of the analysis
show that there is a positive, bidirectional causality relationship between economic growth and energy
consumption for Ukraine (the “Feedback Hypothesis”). In addition, the results of the panel data
analysis suggest that reducing energy inefficiency, increasing “own production” of energy (including
renewable energy), and liberalizing the energy sector of Ukraine could all be valuable strategies for
increasing the country’s economic growth.

Partners

ČSOB
Deloitte
McKinsey & Company

Sponsors

CRIF