Dynamic analysis of the relationship between the energy consumption and economic growth in Hebei:based on the state space model

Aiming at the limitation of the former literature on the static analysis,this paper empirically analyzes the dynamic relationship between energy consumption and economic growth by using the time series data of output,capital,employment and energy consumption in Hebei from 1980 to 2012.The state space model of energy consumption and economic growth in Hebei province has been built basing on the multivariate framework and tested through stationary and cointegration test.Then,time-varying parameters of the model have been estimated using Kalman filter,as well as analyzing their fluctuation.Results indicate:the energy consumption have the substitution to the labor,and play a greater role in boosting economic growth.At this stage with atmospheric controlling energy demand has declined,which will bring down the economy.To solve this problem,we should speed up technical transformation and upgrade the industrial structure using a combination of tax subsidies or another.