THE NEXUS BETWEEN ENERGY CONSUM PTION AND ECONOMIC GROWTH: THE CASE OF MÉXICO

This study examines the relationship between energy consumption and economic growth in Mexico within a multivariate framework in order to determine the degree to which energy consumption influences economic growth prospects in Mexico. Throughout this study, we look at the relation- ship between different forms of energies and economy growth. We used the granger causality test, which enabled us to verify the direction of causality between the variables of interest; the Breusch-Godfrey Serial Correlation LM test, to test for serial correlation of the stochastic variable and the ADF to test for stationary of the model. The results showed that there is a bi- directional relationship between economic growth and energy consump- tion in Mexico. Looking at all the sectors of usage of energy, we found that electricity produced from coal, nuclear and hydroelectric sources impact positively on economic growth, whereas electricity produced from natural gas and oil highly negatively impact on economic growth.