Energy Use and Economic Growth: An Empirical Study of Short-Run and Long-Run Dynamics for Colombia Between 1990 and 2021

Abstract

This research aims to study the relationship between energy use and economic growth between 1990 and 2021 in Colombia. Energy is a key element for economic growth and to improve people’s living standards, especially in developing economies like Colombia. To estimate both the short-run and long-run relationship between economic growth and energy use and economic growth, we used data from 1990 to 2021 and we estimated an error correction model along with a regression using the FMOLS/DOLS estimators. We found that economic growth and energy use are related in the short run in Colombia, according to the Toda–Yamamoto causality test, GDP granger causes energy use and there’s not enough evidence to claim that energy use and GDP are related in the long run. JEL Classification: Q43.