Relationship Between Japan’s Renewable Energy Generating Capacity and Economic Growth Based on ARDL Model

ABSTRACT

Under the background of the global energy shortage and Japan's Fukushima nuclear spill, Japan is faced with an important choice whether to abandon nuclear power or develop renewable energy. This paper used autoregressive distributed lag model to do the empirical analysis of the relationship between renewable energy generating capacity and economic growth, using the data of renewable energy generating capacity and real GDP between 1991 and 2010. The empirical evidence suggests that renewable energy generating capacity in Japan has emerged the ability to boost and promote economic growth in Japan in both the long-term and short-term. If the Japanese government determines to develop the renewable energy industry vigorously, Japan's economy is likely to usher in the take-off once again in the future, in addition that it will benefit the environmental mitigation and protection issues such as energy security.

Keywords:

Abandon nuclear power, Autoregressive distributed lag model, Economic growth, Energy issue, Renewable energy generating capacity.