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Energy Consumption and Economic Growth in Pakistan

Author

Listed:
  • Muhammad Zeshan

    (Sustainable Development Policy Institute, Islamabad, Pakistan)

  • Vaqar Ahmed

    (Sustainable Development Policy Institute, Islamabad, Pakistan)

Abstract

The present study investigates the impact of energy consumption on real GDP, capital stock, and labor force using annual data for the period of 1971-2012. For empirical analysis, it employs the Structural Vector Auto-regression (SVAR) framework. The results reveal that economic growth increases the demand for labor force, but this rise is not sustainable. Same is the case for other factors such as capital stock and energy. We see that greater energy inputs are required to facilitate the new additions to capital stock. Further, an exogenous shock to capital stock and labor force stimulates the economic activity temporarily. Rising capital stock also demands greater units of labor as productive activity expands in the economy. The research work recommends the government to focus on its supply-line. A certain and affordable power supply is the need of time.

Suggested Citation

  • Muhammad Zeshan & Vaqar Ahmed, 2013. "Energy Consumption and Economic Growth in Pakistan," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 1(2), pages 8-20, June.
  • Handle: RePEc:ijr:beejor:v:1:y:2013:i:2:p:8-20
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    Citations

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    Cited by:

    1. Mohd Shahidan Shaari & Nor Ermawati Hussain & Hussin Abdullah & Syahida Kamil, 2014. "Relationship among Foreign Direct Investment, Economic Growth and CO2 Emission: A Panel Data Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 706-715.
    2. Hamdi, Helmi & Sbia, Rashid & Shahbaz, Muhammad, 2014. "The nexus between electricity consumption and economic growth in Bahrain," Economic Modelling, Elsevier, vol. 38(C), pages 227-237.
    3. Shahbaz, Muhammad & Loganathan, Nanthakumar & Zeshan, Mohammad & Zaman, Khalid, 2015. "Does renewable energy consumption add in economic growth? An application of auto-regressive distributed lag model in Pakistan," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 576-585.
    4. Islam, Faridul & Shahbaz, Muhammad & Rahman, Mohammad Mafizur, 2013. "Trade Openness, Financial Development Energy Use and Economic Growth in Australia:Evidence on Long Run Relation with Structural Breaks," MPRA Paper 52546, University Library of Munich, Germany, revised 28 Dec 2013.
    5. Jaka Sriyana, 2019. "Dynamic Effects of Energy Consumption on Economic Growth in an Emerging Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 283-290.
    6. Khan, Saleheen & Jam, Farooq Ahmed & Shahbaz, Muhammad & Mamun, Md Al, 2018. "Electricity Consumption, Economic Growth and Trade Openness in Kazakhstan: Evidence from Cointegration and Causality," MPRA Paper 87977, University Library of Munich, Germany, revised 14 Jul 2018.
    7. Abbas Ali Chandio & Yuansheng Jiang & Jam Ghulam Murtaza Sahito & Fayyaz Ahmad, 2019. "Empirical Insights into the Long-Run Linkage between Households Energy Consumption and Economic Growth: Macro-Level Empirical Evidence from Pakistan," Sustainability, MDPI, Open Access Journal, vol. 11(22), pages 1-17, November.

    More about this item

    Keywords

    Energy; Growth; Pakistan;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture

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