Nuclear Energy Consumption and Economic Growth in the UK: Evidence from Wavelet Coherence Approach.

Abstract

The aim of this present study is to assess the causal link between nuclear energy consumption and economic growth in the UK using Toda Yamamoto causality and wavelet coherence tests with the objective of responding to the following questions: (i) Does consumption of nuclear energy lead to economic growth in the UK and/or does economic growth lead to the consumption of nuclear energy sources in the UK, and (ii) if so, why? The findings from wavelet coherence reveal that changes in economic growth lead to changes in nuclear energy consumption in the UK at different frequencies, especially in the long-run, and in different periods between 1998 and 2017. In addition, there is a positive correlation between nuclear energy consumption and economic growth between 2002 and 2006 in the short-run. In this study, we also checked the consistency of the findings from wavelet coherence which is confirmed by the outcomes of Toda Yamamoto causality test. Therefore, the present study is likely to attract great interest from the policy-makers and researchers in this field. At the same time, it is likely to start a new debate.