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Natural Gas Consumption and Economic Growth in Pakistan

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  • Muhammad, Shahbaz
  • Lean, Hooi Hooi
  • Abdul, Farooq

Abstract

Natural gas is a dominant fuel in Pakistan. It offers the cheapest and a cleaner alternative source of energy. This paper examines the relationship of natural gas consumption and economic growth in Pakistan. We include capital, labor and exports in the model with multivariate framework. The ARDL bounds testing approach to cointegration and innovative accounting approach are employed to investigate the dynamic causality relationships among the variables. We find the existence of long-run relationship among the variables. Natural gas consumption, real capital, labor and real exports are positively affecting the economic growth in Pakistan. Furthermore, we support the natural gas consumption-led-growth hypothesis and suggest that the natural gas conservation policies may retard the rate of economic growth.

Suggested Citation

  • Muhammad, Shahbaz & Lean, Hooi Hooi & Abdul, Farooq, 2012. "Natural Gas Consumption and Economic Growth in Pakistan," MPRA Paper 40959, University Library of Munich, Germany, revised 30 Aug 2012.
  • Handle: RePEc:pra:mprapa:40959
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    More about this item

    Keywords

    Gas Consumption; Economic Growth;

    JEL classification:

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

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