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Is Renewable Energy Consumption Effective to Promote Economic Growth in Pakistan: Evidence from Bounds Testing and Rolling Window Approach

Author

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  • Muhammad, Shahbaz
  • Qazi, Muhammad Adnan Hye
  • Muhammad, Zeshan

Abstract

The aim of present study is to re-investigate the impact of renewable energy consumption on economic growth by incorporating capital and labor as potential determinants of production function in case of Pakistan. We have used the ARDL bounds testing and rolling window approach (RWA) for cointegration. The causality analysis is conducted by applying the VECM Granger causality and innovative accounting approaches. The results showed that all the variables are cointegrated for long run relationship. Renewable energy consumption, capital and labor boost economic growth. The causality analysis indicated bidirectional causality between economic growth, renewable energy consumption and capital over the period of 1972Q1-2011Q4. The study opens up new directions for policy makers to explore new sources of energy sustain economic growth.

Suggested Citation

  • Muhammad, Shahbaz & Qazi, Muhammad Adnan Hye & Muhammad, Zeshan, 2012. "Is Renewable Energy Consumption Effective to Promote Economic Growth in Pakistan: Evidence from Bounds Testing and Rolling Window Approach," MPRA Paper 41608, University Library of Munich, Germany, revised 27 Sep 2012.
    • Handle: RePEc:pra:mprapa:41608
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    References listed on IDEAS

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    Cited by:

    1. Sebri, Maamar, 2015. "Use renewables to be cleaner: Meta-analysis of the renewable energy consumption–economic growth nexus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 657-665.

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    More about this item

    Keywords

    Renewable Energy; Economic Growth; Rolling Window Approach;
    All these keywords.

    JEL classification:

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

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