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

Nicholas Apergis () and James Payne ()

Energy Economics, 2010, vol. 32, issue 6, 1421-1426

Abstract: 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.

Keywords: Energy; consumption; Growth; Panel; unit; root; and; cointegration; tests; Granger-causality (search for similar items in EconPapers)
Date: 2010
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