The Effect of Energy Consumption on Economic Growth In Iran Bayesian Model Averaging

This paper investigates relationship of 16 variables on economic growth in Iran, using Bayesian Model Averaging (BMA) and annual time series data from 1961 to 2014. “Inclusion probability” indicates that investment ratio, population growth rate (with a negative sign), imported capital good growth, labor force growth, and imported intermediate good growth take the first to fifth rank regarding their effects on economic growth respectively. The relationship between energy consumption and growth in non-oil production due to the low probability of this variable in the model is insignificant. Thus saving energy policies are not a threat to economic growth in Iran