Co-Movement Among Electricity Consumption, Economic Growth and Financial Development in Portugal, Italy, Greece, and Spain: A Wavelet Analysis

Reviewer’s Comment

Author’s Response

1.     authors should explicit which were the envisioned benefits of the proposed methodology. It is not clear why authors adopted this methodology apart from the lack of other examples in the literature.

The advantages of the WA are better clarified in Section 1.

2.     data presentation should be improved, mentioning all unit of measurements in all graphs, tables and texts. If some data are percentage values, the basis values should be mentioned in the caption.

The original manuscript fully described each series, reporting definitions, units of measurement, acronyms, and sources. Mentioning all these elements in all graphs, tables, and texts is useless and redundant and also contradicts the journal’s editing guidelines.

3.     data presentation does not clearly show the used datasources. In particular, it is not clear if FD and EPC are both referred to domestic sector. In the reviewer's opinion, FD and EPC should be limited to the same sector. If EPC was referred to the overall National consumption, the influence of industrial customers could not be disregarded.

As the reviewer certainly knows, WDI and FRED data refer to national data. Previous studies used the same kind of series.

4.     main findings about FD/EPC relationship could be better elaborated, improving the current presentation which currently reports limited correlations.

The relationship between FD and EPC has been better elaborated in Section 4.

5.     main findings about methodology are not reported neither emphasized. It is not clear why this methodology should be adopted in other countries or for other period.

The advantages of the WA are better clarified in Section 1.

6.     on the one hand, many researchers recently claimed existing decoupling between CO2 and GDP in Europe, on the other hand, electrification of the domestic consumptions is a growing trend in Europe. These 2 aspects are not considered most likely because of lack of the most recent data. However, these trends should be referenced and discussed in the paper.

We appreciate the Reviewer #1’s comment regarding the recent trends in CO₂-GDP decoupling and the electrification of domestic consumption in Europe. These are indeed important developments that add context to our study, even though the scope is limited to the dataset covering 1970–2014. To address this, a paragraph has been added in Section 5.

Reviewer’s Comment

Author’s Response

1.     Many articles have already analysed the electricity consumption (EPC), economic growth and financial development (FD) of Portugal for 1970-2014. Is it worth repeating this data? Perhaps it is necessary to choose other countries for the study.

While we acknowledge that Portugal has been studied previously, we believe our study provides significant value by employing a novel methodological approach and comparing Portugal with other PIGS countries (Italy, Greece, and Spain). By including Portugal alongside other PIGS countries, our study offers a comparative perspective that is scarce in the existing literature. This approach helps identify commonalities and differences within this regional group, shedding light on how shared economic and political challenges (e.g., financial crises, EU integration) influence the energy-finance-growth nexus across countries. Revisiting Portugal within this comparative framework allows us to derive policy recommendations not only for Portugal but also for similarly situated countries. The insights can guide policymakers in addressing contemporary challenges such as energy transition and financial stability.

2.     Wavelet analysis is a modern and promising method of data processing. What exactly do the authors of the article do with it? The article is not very specific. What tools were used?

The advantages of the WA are better clarified in Section 1.

3.     The analysis of literature sources was done for the last 7 years, and the analysis by country for 1970-2014? How to combine this?

Since this topic has been extensively examined in the literature, we decided to center the literature review on recent papers only. Instead, the dataset, as clarified in Section 3, has been built upon data availability.

4.     In Table 1, it would be advisable to show the values of the variables.

A note has been added to Table 1.

5.     The article would have been more relevant if the study had been conducted during the COVID-19 pandemic and the conflict in Ukraine. Was there no analysis after 2019 at all? Was there no connection between electricity consumption (EPC), economic growth and financial development (FD)?

As explained earlier, the empirical analysis is dictated by data availability. Moreover, the period between 2020 and 2024 has been revolutionized by the COVID-19 pandemic and Russia-Ukraine war, so the sample would have been highly biased.

Reviewer’s Comment

Author’s Response

1.     authors should explicit which were the envisioned benefits of the proposed methodology. It is not clear why authors adopted this methodology apart from the lack of other examples in the literature.

The advantages of the WA are better clarified in Section 1.

2.     data presentation should be improved, mentioning all unit of measurements in all graphs, tables and texts. If some data are percentage values, the basis values should be mentioned in the caption.

The original manuscript fully described each series, reporting definitions, units of measurement, acronyms, and sources. Mentioning all these elements in all graphs, tables, and texts is useless and redundant and also contradicts the journal’s editing guidelines.

3.     data presentation does not clearly show the used datasources. In particular, it is not clear if FD and EPC are both referred to domestic sector. In the reviewer's opinion, FD and EPC should be limited to the same sector. If EPC was referred to the overall National consumption, the influence of industrial customers could not be disregarded.

As the reviewer certainly knows, WDI and FRED data refer to national data. Previous studies used the same kind of series.

4.     main findings about FD/EPC relationship could be better elaborated, improving the current presentation which currently reports limited correlations.

The relationship between FD and EPC has been better elaborated in Section 4.

5.     main findings about methodology are not reported neither emphasized. It is not clear why this methodology should be adopted in other countries or for other period.

The advantages of the WA are better clarified in Section 1.

6.     on the one hand, many researchers recently claimed existing decoupling between CO2 and GDP in Europe, on the other hand, electrification of the domestic consumptions is a growing trend in Europe. These 2 aspects are not considered most likely because of lack of the most recent data. However, these trends should be referenced and discussed in the paper.

We appreciate the Reviewer #1’s comment regarding the recent trends in CO₂-GDP decoupling and the electrification of domestic consumption in Europe. These are indeed important developments that add context to our study, even though the scope is limited to the dataset covering 1970–2014. To address this, a paragraph has been added in Section 5.

Reviewer’s Comment

Author’s Response

1.     Many articles have already analysed the electricity consumption (EPC), economic growth and financial development (FD) of Portugal for 1970-2014. Is it worth repeating this data? Perhaps it is necessary to choose other countries for the study.

While we acknowledge that Portugal has been studied previously, we believe our study provides significant value by employing a novel methodological approach and comparing Portugal with other PIGS countries (Italy, Greece, and Spain). By including Portugal alongside other PIGS countries, our study offers a comparative perspective that is scarce in the existing literature. This approach helps identify commonalities and differences within this regional group, shedding light on how shared economic and political challenges (e.g., financial crises, EU integration) influence the energy-finance-growth nexus across countries. Revisiting Portugal within this comparative framework allows us to derive policy recommendations not only for Portugal but also for similarly situated countries. The insights can guide policymakers in addressing contemporary challenges such as energy transition and financial stability.

2.     Wavelet analysis is a modern and promising method of data processing. What exactly do the authors of the article do with it? The article is not very specific. What tools were used?

The advantages of the WA are better clarified in Section 1.

3.     The analysis of literature sources was done for the last 7 years, and the analysis by country for 1970-2014? How to combine this?

Since this topic has been extensively examined in the literature, we decided to center the literature review on recent papers only. Instead, the dataset, as clarified in Section 3, has been built upon data availability.

4.     In Table 1, it would be advisable to show the values of the variables.

A note has been added to Table 1.

5.     The article would have been more relevant if the study had been conducted during the COVID-19 pandemic and the conflict in Ukraine. Was there no analysis after 2019 at all? Was there no connection between electricity consumption (EPC), economic growth and financial development (FD)?

As explained earlier, the empirical analysis is dictated by data availability. Moreover, the period between 2020 and 2024 has been revolutionized by the COVID-19 pandemic and Russia-Ukraine war, so the sample would have been highly biased.

Reviewer’s Comment

Author’s Response

1.     Authors should clearly discuss the limitations of the study, if FD and EPC are not limited to domestic sector, this limitation should be clearly discussed. In the reviewer's opinion, FD and EPC should be limited to the same sector. If EPC was referred to the overall National consumption, the influence of industrial customers could not be disregarded. Data about sectorial consumptions are available and they should be included. A clear discussion about assumptions and limitations should be included.

We thank the reviewer for raising this important point about the scope of financial development (FD) and electricity consumption (EPC) data and the need for a clear discussion of assumptions and limitations. We agree that sectoral alignment of FD and EPC data would offer deeper insights and improve the precision of our analysis.

1. Assumptions in the current study: In the current analysis, EPC data represents overall national electricity consumption, which includes both domestic and industrial sectors. This broad measure was chosen due to its availability and relevance to the macroeconomic scope of the study. Similarly, FD is assessed as a macroeconomic indicator, reflecting the overall financial activity of the country. While this approach aligns with our study’s focus on national-level dynamics, we acknowledge that it does not allow for sector-specific analysis of the EPC-FD relationship.
2. Sectoral consumption Data: We recognize the reviewer’s point that industrial customers contribute significantly to national electricity consumption and may exhibit different dynamics compared to the domestic sector. While sectoral consumption data was not included in this study, we acknowledge that such granularity could yield valuable insights, particularly when analyzing how FD influences electricity consumption in different sectors.
3. Limitations and Future Research: We have revised Section 5 (Conclusions) to explicitly discuss this limitation. We note that by using aggregate data, our analysis does not account for potential heterogeneity in EPC-FD interactions across sectors, such as industrial, residential, or commercial. We also outline how future research could incorporate sector-specific EPC and FD data to better understand these dynamics.
4. Incorporating sectoral data in future extensions: While data constraints limited this study to aggregate measures, we agree that incorporating sectoral electricity consumption data alongside corresponding financial metrics would enhance the robustness of the analysis. We plan to address this in future research by leveraging available data on sectoral electricity consumption to evaluate whether the relationships identified in this study hold across different sectors.

In addition, please note that the Editor gave us only 3 days to resubmit the paper, so it was absolutely impossible to download the new series, conduct the new empirical analyses, and write a new discussion with (eventual) different policy implications.

Reviewer’s Comment

Author’s Response

1.     Accept after minor revisions (corrections to minor methodological errors and text editing)

A text editing has been performed. Some typos have been fixed.

Reviewer’s Comment

Author’s Response

1.     Authors should clearly discuss the limitations of the study, if FD and EPC are not limited to domestic sector, this limitation should be clearly discussed. In the reviewer's opinion, FD and EPC should be limited to the same sector. If EPC was referred to the overall National consumption, the influence of industrial customers could not be disregarded. Data about sectorial consumptions are available and they should be included. A clear discussion about assumptions and limitations should be included.

We thank the reviewer for raising this important point about the scope of financial development (FD) and electricity consumption (EPC) data and the need for a clear discussion of assumptions and limitations. We agree that sectoral alignment of FD and EPC data would offer deeper insights and improve the precision of our analysis.

1. Assumptions in the current study: In the current analysis, EPC data represents overall national electricity consumption, which includes both domestic and industrial sectors. This broad measure was chosen due to its availability and relevance to the macroeconomic scope of the study. Similarly, FD is assessed as a macroeconomic indicator, reflecting the overall financial activity of the country. While this approach aligns with our study’s focus on national-level dynamics, we acknowledge that it does not allow for sector-specific analysis of the EPC-FD relationship.
2. Sectoral consumption Data: We recognize the reviewer’s point that industrial customers contribute significantly to national electricity consumption and may exhibit different dynamics compared to the domestic sector. While sectoral consumption data was not included in this study, we acknowledge that such granularity could yield valuable insights, particularly when analyzing how FD influences electricity consumption in different sectors.
3. Limitations and Future Research: We have revised Section 5 (Conclusions) to explicitly discuss this limitation. We note that by using aggregate data, our analysis does not account for potential heterogeneity in EPC-FD interactions across sectors, such as industrial, residential, or commercial. We also outline how future research could incorporate sector-specific EPC and FD data to better understand these dynamics.
4. Incorporating sectoral data in future extensions: While data constraints limited this study to aggregate measures, we agree that incorporating sectoral electricity consumption data alongside corresponding financial metrics would enhance the robustness of the analysis. We plan to address this in future research by leveraging available data on sectoral electricity consumption to evaluate whether the relationships identified in this study hold across different sectors.

In addition, please note that the Editor gave us only 3 days to resubmit the paper, so it was absolutely impossible to download the new series, conduct the new empirical analyses, and write a new discussion with (eventual) different policy implications.

Reviewer’s Comment

Author’s Response

1.     Accept after minor revisions (corrections to minor methodological errors and text editing)

A text editing has been performed. Some typos have been fixed.