Does energy use cause economic growth in Latin America?

This study analyses the relationship between energy consumption and economic growth, using annual panel data from 16 Latin American countries over the period 1971–2001. We use a random coefficient (RC) method to control for both finite sample and sample-heterogeneity biases. Our results show (1) a long-run relationship between real GDP, energy consumption, labour force and real capital stock and (2) a long-run unidirectional causality running from energy to economic growth. These results support the energy-driven growth hypothesis.