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Dynamic Relationship between Energy Consumption and Economic Growth: Evidence from Pakistan

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  • Muhammad Imran Khan
  • Muhammad Waqas

Abstract

This study investigated the dynamic link between energy consumption and economic growth by using time series data of Pakistan from 1980-2011. Augmented Granger Causality test depicted unidirectional causality running from economic growth to energy consumption. Petroleum consumption granger cause economic growth. There was unidirectional causality between gas consumption and economic growth. The study found that GDP granger cause electricity consumption. Engle-Granger test was applied for aggregate analysis of energy consumption and economic growth which showed long run relationship between the variables. ARDL co-integration approach was used for disaggregate analysis which revealed only short run relationship between gas consumption and economic growth. There was only long run relationship between electricity consumption and economic growth.

Suggested Citation

  • Muhammad Imran Khan & Muhammad Waqas, 2014. "Dynamic Relationship between Energy Consumption and Economic Growth: Evidence from Pakistan," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 3(1), pages 31-42.
    • Handle: RePEc:rss:jnljee:v3i1p4
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    References listed on IDEAS

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