Energies, Vol. 18, Pages 5394: Investigating the Asymmetric Impact of Renewable and Non-Renewable Energy Production on the Reshaping of Future Energy Policy and Economic Growth in Greece Using the Extended Cobb–Douglas Production Function

Energies, Vol. 18, Pages 5394: Investigating the Asymmetric Impact of Renewable and Non-Renewable Energy Production on the Reshaping of Future Energy Policy and Economic Growth in Greece Using the Extended Cobb–Douglas Production Function

Energies doi: 10.3390/en18205394

Authors:
Dritsaki
Dritsaki

This paper investigates the symmetric and asymmetric effects of renewable and non-renewable energy on Greece’s economic growth within an extended Cobb–Douglas production function for 1990–2022. The study is motivated by the rising role of renewable energy and the need to determine whether the energy–growth nexus is linear or nonlinear, an issue of central importance for policy. The Brock–Dechert–Scheinkman (BDS) test confirms the nonlinearity of the variables, while Zivot–Andrews unit root tests with structural breaks capture crisis-related disruptions. The Wald test indicates that renewable energy has an asymmetric long-run relationship with growth, whereas non-renewables exert symmetric effects. To model these dynamics, the Nonlinear Autoregressive Distributed Lag (NARDL) framework is applied. Results show that in the long run, positive shocks to renewable energy enhance growth, while both positive and negative shocks to non-renewables have symmetric impacts. In the short run, only non-renewable energy shocks significantly affect growth. Asymmetric causality analysis reveals a bidirectional relationship between positive renewable shocks and growth, suggesting a virtuous cycle of renewable expansion and economic performance. The study contributes by providing the first systematic evidence for Greece on the nonlinear energy–growth nexus, advancing empirical modeling with NARDL and break-adjusted tests, and highlighting the heterogeneous growth effects of renewable versus non-renewable energy.