Analysis of The Effect of Economic Growth on Energy Demand in Indonesia

This study analized the growth of economic viewpoints to examine how energy demand effects economic growth in Indonesia. It utilizes 4 decades from 1970 – 2016 and the bound testing cointegration approach along with multivariate Granger Casuality by using VECM model to examine probable statistical relationship between the variables. Results based on bound test approach suggest that if economic growth increases then energy consumption increases. Unlike the short term, energy does not affect changes in economic growth. Meanwhile, the activity of trade openness and energy consumption is increasing where the authors hypothesize that energy demand will increase