Breaks and Trends in OECD Countries’ Energy-GDP Ratios

This paper uses the econometrics of endogenous structural breaks to examine changes in energy intensity trends for OECD countries over 1960-2009. Nearly all OECD countries currently have significant negatively trending energy-GDP ratios; but for several countries those negative trends are recent, and two countries have recent significant positive trends. For several countries, energy intensity had a significant positive trend followed by a break and then a significant negative trend. Those break-dates, however, appear to have little to do with level of development (GDP per capita). Alternatively, the volatile energy prices of the 1970s and early 1980s played a role in many of the countries that experienced inverted-V breaks. These findings have implications for future modeling and forecasting of energy consumption as well as for the role of energy price policy in developed and developing countries