Electricity consumption and economic growth: evidence from Pakistan
AbstractThe prime objective of this study is to examine the long run relationship between real GDP per capita and electricity consumption for Pakistan over the period 1971 to 2008. The results reveal that there is unidirectional causality from electricity consumption to real GDP per capita. The findings of the study also show that there is a long run relationship between real GDP per capita and electricity consumption. The unidirectional causality running from electricity consumption to economic growth indicates that electricity is a limiting factor to economic growth and hence shocks to electricity supply will have a negative impact on economic growth. The implication emerging from this study is that for an electricity-deficient country like Pakistan, where the electricity sector operates at bare capacity margin, there is a need for planning and investment in infrastructure development to fulfill increased electricity demand.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 48011.
Date of creation: 19 Apr 2012
Date of revision: 01 Oct 2012
Publication status: Published in Economics and Business Letters Economics Journal 1.2(2013): pp. 21-32
electricity consumption; economic growth; causal relationship; cointegration;
Other versions of this item:
- Zahid Ashraf & Attiya Yasmin Javid & Muhammad Javid, 2013. "Electricity consumption and economic growth: evidence from Pakistan," Economics and Business Letters, Oviedo University Press, vol. 2(1).
- A1 - General Economics and Teaching - - General Economics
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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