The role of technology-based renewable energy investments on macroeconomic stability

Abstract

The aim of this study is to evaluate the effects of technology-based renewable energy investments on macroeconomic stability. Within this framework, first of all, necessary information is given with respect to the types of renewable energy and their advantages. After that, the literature is reviewed so that the views of the researchers related to this topic can be defined. Moreover, an analysis is performed for MINT countries (Mexico, Indonesia, Nigeria and Turkey). For this purpose, Pedroni panel cointegration analysis is taken into account. In this framework, economic growth and current account deficit are used regarding the macroeconomic stability. The findings indicate that there is a long-term relationship between renewable energy investment and economic growth. Another important conclusion is that renewable energy investment projects have a positive contribution to reduce current account deficit problem. It can be understood that renewable energy investments play a very key role to provide macroeconomic stability in the country. Hence, it is obvious that these projects should be supported by the states. In this context, there should be financial support by giving loans with low interest rates. Renewable energy investment projects need extensive technical knowledge. Therefore, another important incentive for this process can be the technological support. With the help of these supports, macroeconomic stability can be improved by using the energy which does not harm the environment.