China-USA Business Review, ISSN 1537-1514 August 2012, Vol. 11, No. 8, 1069-1080 Energy Consumption in the Ecuadorian Economy, Empirical Analysis Trough the Method of Vector Autoregressive (VAR), 1973-2006 Juan Manuel García-Samaniego Universidad Técnica Particular de Loja (UTPL), Loja, Ecuador Universidad Nacional Autónoma de México (UNAM), Ciudad de México, Distrito Federal, México Luisa María Reyes Yaguana Universidad Técnica Particular de Loja (UTPL), Loja, Ecuador Several authors have been able to establish the relationship between energy consumption and economic growth. Empirical evidence shows different effects depending on the size and economic structure of a country to energy ratio, Gross Domestic Product (GDP), and employment. Historically the case of Ecuador, the study of energy consumption and economic growth has not been discussed, despite its importance in the generation of development policies. So the idea of analyzing the effects of energy consumption in Ecuador’s economic growth with reference to the period 1978-2009, and also to know which variables determine it. Through a program econometric equation was estimated vector autoregressive model, in order to meet the long-term based on the Johansen’s methodology estimates a vector error correction to analyze and describe the effects on the short term. Presents tools of analysis of these models, impulse response and decomposition of the variables, which extends the study of the trajectory of the variables mentioned. The results of this study show that the relationship between energy consumption and economic growth, maintain a direct and positive energy prices. Employment front there is a negative impact. In conclusion to Ecuador, reminiscent of developed countries, energy consumption has a positive effect on economic growth thereof; industrialization generates increased energy while decreasing unskilled jobs, thus the creation of more spaces use of specialized type, at the same time increasing energy consumption, generates increased price of it, or its derivatives. Keywords: power consumption, Ecuador, economic growth, employment, vector autoregressive Introduction Theories of development and energy consumption have been widely discussed through different econometric models (Galindo & Sánchez, 2005; Mabey, Smith, Hall, & Gupta, 1997; Jorgenson, 1998; Pindyk, 1979). The use of VAR models represents simple estimate and in many cases more reliable results than those of Juan Manuel García-Samaniego, Ph.D., Principal Research of The Institute of Economic Research, Universidad Técnica Particular de Loja (UTPL); Ph.D., Universidad Nacional Autónoma de México (UNAM). Luisa María Reyes Yaguana, Research Assistant, Institute of Economic Research, Universidad Técnica Particular de Loja (UTPL). Correspondence concerning this article should addressed to Juan Manuel García-Samaniego, San Cayetano alto s/n, Building UPSI, floor 2. E-mail: mgarcia@utpl.edu.ec; samaniego@comunidad.unam.mx.s. DAVID PUBLISHING D