Energy consumption and growth in South America: Evidence from a panel error correction model

This study examines the relationship between energy consumption and economic growth for a panel of nine South American countries over the period 1980–2005 within a multivariate framework. Given the relatively short span of the time series data, a panel cointegration and error correction model is emp...

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Bibliographic Details
Published in:Energy economics 2010-11, Vol.32 (6), p.1421-1426
Main Authors: Apergis, Nicholas, Payne, James E.
Format: Article
Language:English
Subjects:
Americas
Applied sciences
Capital formation
Causality
Cointegration
Comparative government
Cross-national analysis
Economic data
Economic development
Economic growth
Economic models
Economics
Energy
Energy consumption
Energy consumption Growth Panel unit root and cointegration tests Granger-causality
Energy economics
Error correction
Error correction & detection
Error correction models
Exact sciences and technology
General aspects
General, economic and professional studies
Granger-causality
Gross domestic product
Growth
Labor
Mathematical models
Methodology. Modelling
Panel data
Panel unit root and cointegration tests
Panels
South America
Statistics
Studies
Time series
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Summary:This study examines the relationship between energy consumption and economic growth for a panel of nine South American countries over the period 1980–2005 within a multivariate framework. Given the relatively short span of the time series data, a panel cointegration and error correction model is employed to infer the causal relationship. Pedroni's heterogeneous panel cointegration test reveals a long-run equilibrium relationship between real GDP, energy consumption, the labor force, and real gross fixed capital formation with the respective coefficients positive and statistically significant. The Granger-causality results indicate both short-run and long-run causality from energy consumption to economic growth which supports the growth hypothesis.
ISSN:0140-9883
1873-6181
DOI:10.1016/j.eneco.2010.04.006