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27/07/2022

Energy consumption and economic development: Granger causality analysis for Vietnam

The paper aims at investigating the causal relationship between energy consumption,
GDP and trade in Vietnam for the period of reform (Doi moi),1986? 2006. We apply the method
of Granger causality test to examine this relationship. Both bivariate and multivariate models of
Granger causality test have been applied. Our results indicate the existence of the strong long – and
short-run bidirectional Granger causality relationship between GDP and trade, energy and
GDP in the long run. In the short run, we also found the weak unidirectional Granger causality
running from GDP to Energy and from trade to energy.