Abstract: Using annual data 1988-2009, the nexus between coal production and economic growth in Inner Mongolia was investigated within a multivariate framework which includes coal production (CP), InnerMongolia’s GDP (GDP) and coal consumption (CC ), results show that there is a cointegration relationship between CP and the two other variables. The Granger causality test shows that there is two -way Granger causality relationship from CP to GDP and CC. The generalized impulse response and variance decomposition analysis shows that GDP in the medium and long term impact of coal production is very important, and the growth of output has been accelerating regional economic development; the short-term impact of production on consumption increases significantly, while consumption restricting the long-term development of production.