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Turn on the Lights: Macroeconomic Factors Affecting Renewable in Pakistan

Author

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  • Malik, Ihtisham Abdul
  • Siyal, Ghamz-e-Ali
  • Abdullah, Alias Bin
  • Alam, Arif
  • Zaman, Khalid
  • Kyophilavong, Phouphet
  • Shahbaz, Muhammad
  • Baloch, Siraj Ullah
  • Shams, Tauqeer

Abstract

The objective of the study is to examine the relationship between macroeconomic factors (i.e., population growth; urbanization, industrialization, exchange rate, price level, food production index and live stock production index) and renewable energy in Pakistan over a period of 1975-2012. In addition, this study uses oil rent as an intervening variable to overcome the biasness of the single equation model. The results indicate that macroeconomic factors positively contributed to renewable energy consumption in Pakistan. The causality test indicate that there is a unidirectional causality running towards macroeconomic factors to renewable energy in Pakistan, however, renewable energy Granger cause oil rent but not via other route. In addition, there is bidirectional causality between exchange rate and live stock production in Pakistan. Variance decomposition analysis shows that economic growth has a major contribution to increase renewable energy in Pakistan.

Suggested Citation

  • Malik, Ihtisham Abdul & Siyal, Ghamz-e-Ali & Abdullah, Alias Bin & Alam, Arif & Zaman, Khalid & Kyophilavong, Phouphet & Shahbaz, Muhammad & Baloch, Siraj Ullah & Shams, Tauqeer, 2014. "Turn on the Lights: Macroeconomic Factors Affecting Renewable in Pakistan," MPRA Paper 56828, University Library of Munich, Germany, revised 23 Jun 2014.
    • Handle: RePEc:pra:mprapa:56828
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    2. Zied Ftiti & Aviral Tiwari & Amél Belanès & Khaled Guesmi, 2014. "Tests of Financial Market Contagion: Evolutionary Cospectral Analysis V.S. Wavelet Analysis," Working Papers 2014-577, Department of Research, Ipag Business School.
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    10. Zaman, Khalid & Abdullah, Alias bin & Khan, Anwar & Nasir, Mohammad Rusdi bin Mohd & Hamzah, Tengku Adeline Adura Tengku & Hussain, Saddam, 2016. "Dynamic linkages among energy consumption, environment, health and wealth in BRICS countries: Green growth key to sustainable development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 1263-1271.
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    More about this item

    Keywords

    Renewable energy; oil rent; exchange rate; consumer price index; Pakistan;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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