Energy Consumption & Economic Growth Nexus: Evidence from Pakistan

Aneel Salman (), Nadia Asghar (), Tahir-ul-Mulk Kahlon () and Muhammad Waqas Chughtai ()
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Aneel Salman: Ghulam Ishaq Khan Institute of Engineering Sciences and Technology, KPK Pakistan
Nadia Asghar: National Defence University Islamabad-Pakistan
Tahir-ul-Mulk Kahlon: National Defence University Islamabad-Pakistan
Muhammad Waqas Chughtai: National Defence University Islamabad-Pakistan

Acta Universitatis Danubius. OEconomica, 2013, issue 9(3), 132-139

Abstract: Energy is considered a key ingredient for economic growth of a country. It increases not only the employment but also the living standards of individuals. This paper has objective to find the extensive association between energy consumption and economic growth in Pakistan from the periods of 1978 to 2012 by applying Johansen co integration, error correction model and the granger causality test which present the unidirectional causality between energy consumption and economic growth, it starts from consumption to growth. The results also conclude that less prices and drop off energy shortfalls, favourable policies and reduced uncertainty may lead to economic growth for Pakistan. This study also defines the significance of energy sector and suggests direct investment in this sector by utilizing local energy resources.

Keywords: GDP; Productivity; Granger Causality (search for similar items in EconPapers)
Date: 2013
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