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Natural Gas Consumption and Economic Growth in Pakistan: Production Function Approach

Author

Listed:
  • Muhammad Shahid Hassan
  • Muhammad Naveed Tahir
  • Ayesha Wajid
  • Haider Mahmood
  • Abdul Farooq

Abstract

This study investigates the relationship between energy consumption and economic growth in case of Pakistan using annual data from 1977 to 2013. Using Johansen maximum likelihood approach to estimate the long-run relationship and Granger causality to check the direction of causality, the study finds that the long-run relationship between natural gas consumption and economic growth is positive and statistically significant. Furthermore, the Granger causality shows that there exists energy-led growth hypothesis in Pakistan as Granger causality runs from energy to economic growth. The policy implication is that uninterrupted availability of energy is essential and conservation strategies could be harmful for the economic growth.

Suggested Citation

  • Muhammad Shahid Hassan & Muhammad Naveed Tahir & Ayesha Wajid & Haider Mahmood & Abdul Farooq, 2018. "Natural Gas Consumption and Economic Growth in Pakistan: Production Function Approach," Global Business Review, International Management Institute, vol. 19(2), pages 297-310, April.
    • Handle: RePEc:sae:globus:v:19:y:2018:i:2:p:297-310
    DOI: 10.1177/0972150917713533
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    References listed on IDEAS

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