Generation of Electricity, GDP, Exports and INPC. A Causality Analysis for Mexico 1970-2015

Over the past years many economies have experienced large increases in international trade, GDP and electricity generation, this has led to plenty of academic research on the effect of an increase in exports to electricity generation and the implications of that on economic growth. This research employs annual data for Mexico from 1970 to 2015 to examine the causal relationship between economic growth (GDP), electricity generation and international trade (exports). As this study found a causal relationship in the Granger sense running from the electricity generation to GDP, it is important that electricity conservation policies are revised by the government because they could have a negative impact on the economic growth. Regardless to electricity generation, especially those that promote the use of renewable sources, it is important their implementation due to the bidirectional causal relationship between exports and electricity generation.