Energy-growth long-term relationship under structural breaks. Evidence from Canada, 17 Latin American Economies and the USA Articles uri icon

authors

  • RODRIGUEZ CABALLERO, CARLOS VLADIMIR
  • Ventosa, D.

publication date

  • January 2017

start page

  • 121

end page

  • 134

volume

  • 61

international standard serial number (ISSN)

  • 0140-9883

electronic international standard serial number (EISSN)

  • 1873-6181

abstract

  • We study the relationship and the causal link between Electric Power Consumption, EPC, and GrossDomestic Product, GDP (both per capita) for 17 countries in Latin America, Canada and the USA. Consideringthat many of these economies underwent important economic crises in the last three decades, we thereforemodel the EPC-GDP relationship through a VEC specification that allows for structural breaks, along with arobust testing methodology of causal links based on the concepts of weak and super exogeneity, rather thanGranger causality. Evidence favorable to the growth hypothesis (EPC→GDP) is found for eight countries,while data of three countries support the conservation hypothesis (GDP→EPC). For three countries evidenceis favorable to the neutrality hypothesis, but should be considered with caution. As for the remaining fivecountries the evidence is not conclusive.

keywords

  • Energy consumption
    Economic growth
    VECM
    Causal links
    Structural breaks