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Electricity consumption and economic growth empirical evidence from Pakistan

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  • Muhammad Shahbaz
  • Mete Feridun

Abstract

The present article uses the Autoregressive Distributed Lag (ARDL) bounds testing procedure to identify the long run equilibrium relationship between electricity consumption and economic growth. Toda-Yamamoto and Wald-test causality tests have identified the direction of the causal relationship between these two variables in the case of Pakistan in the period between 1971 and 2008. Ng-Perron and Clement-Montanes-Reyes unit root tests are used to handle the problem of integrating orders for variables. The results suggest that the two variables are in a long run equilibrium relationship and economic growth leads to electricity consumption and not vice versa.
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  • Muhammad Shahbaz & Mete Feridun, 2012. "Electricity consumption and economic growth empirical evidence from Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(5), pages 1583-1599, August.
  • Handle: RePEc:spr:qualqt:v:46:y:2012:i:5:p:1583-1599
    DOI: 10.1007/s11135-011-9468-3
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