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Disaggregate Energy Consumption, Agricultural Output and Economic Growth in Pakistan


  • Muhammad Zahir Faridi

    (Bahauddin Zakariya University, Multan, Pakistan)

  • Ghulam Murtaza

    (Bahauddin Zakariya University, Multan, Pakistan)


The basic goal of the study is to analyse the impact of energy consumption (i.e., electricity, oil and gas) on economic growth and agriculture sector output in Pakistan. It is desirable to find out relationship between disaggregate energy consumption, economic growth and agricultural sector output of Pakistan because energy crisis has become a central issue now-a-days. Production sector of Pakistan relies on electricity and gas consumption to large extent and these sources of energy are falling short because of many reasons which is disrupting output and consequently exports and real output of the country. To analyse the relationship, we employed time series data from 1972 to 2011. In order to find out long run and short run effects of energy consumption on agricultural output and economic growth, ARDL modelling approach to cointegration is applied after scrutinising the stationarity of data through ADF Test. Where, bound testing procedure is utilised for cointegration to judge the existence of long run relationship among variables and ECM models are formulated for short run analysis. Our econometric models include agricultural output and economic growth as dependant variables and electricity, coal and gas consumption as independent and core variables. The findings of the study indicate that gas and oil consumption are important determinants of economic growth and agricultural output.

Suggested Citation

  • Muhammad Zahir Faridi & Ghulam Murtaza, 2013. "Disaggregate Energy Consumption, Agricultural Output and Economic Growth in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 52(4), pages 493-516.
  • Handle: RePEc:pid:journl:v:52:y:2013:i:4:p:493-516

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    References listed on IDEAS

    1. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
    2. Paul, Shyamal & Bhattacharya, Rabindra N., 2004. "Causality between energy consumption and economic growth in India: a note on conflicting results," Energy Economics, Elsevier, vol. 26(6), pages 977-983, November.
    3. Sarfraz Khan Qureshi & Akhtiar H. Shah, 1992. "A Critical Review of Rural Credit Policy in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 31(4), pages 781-801.
    4. Khan, Mohsin S. & Reinhart, Carmen M., 1990. "Private investment and economic growth in developing countries," World Development, Elsevier, vol. 18(1), pages 19-27, January.
    5. Mozumder, Pallab & Marathe, Achla, 2007. "Causality relationship between electricity consumption and GDP in Bangladesh," Energy Policy, Elsevier, vol. 35(1), pages 395-402, January.
    6. Oh, Wankeun & Lee, Kihoon, 2004. "Energy consumption and economic growth in Korea: testing the causality relation," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 973-981, December.
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    Cited by:

    1. Ghulam Murtaza & Muhammad Zahir Faridi, 2015. "Causality Linkages among Energy Poverty, Income Inequality, Income Poverty and Growth: A System Dynamic Modelling Approach," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 407-425.


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