Financial Development and Economic Growth:The Role of Energy Consumption

Hafiz Muhammad Abubakar Siddique (), Sadaf Usman and Junaid Ishaq
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Hafiz Muhammad Abubakar Siddique: PhD Candidate,Federal Urdu University,Islamabad, Pakistan
Sadaf Usman: Punjab Group of Colleges, Bhara Kahu Campus, Islamabad,Pakistan
Junaid Ishaq: PhD Candidate,Federal Urdu University, Islamabad, Pakistan

Journal of Quantitative Methods, 2018, vol. 2, issue 2, 43-55

Abstract: The study investigates financial development and economic growth nexus, incorporating use of energy resources for Pakistan for 1980-2016, using Johansen co-integration and granger causality approach. The results of Johansen test for co-integration show the link between financial development, energy and economic growth in the long time span. The findings of granger causation test uncovered a two-way causality between capital and economic growth. The one-way causality exists from economic growth in energy and financial development. The findings also exposed the one-way causality from capital formation and exports to use of energy. The government should take steps to make financial sectors stronger as it has a great role in increasing the growth of an economy.

Keywords: Financial Development; Energy Consumption; Johansen co-integration; Pakistan (search for similar items in EconPapers)
JEL-codes: F43 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (6)

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