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Electricity consumption and economic growth empirical evidence from Pakistan

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  • Shahbaz, Muhammad
  • Feridun, Mete
Abstract
The present article uses the Autoregressive Distributed Lag (ARDL) bounds testing procedure to identify the long run equilibrium relationship between electricity consumption and economic growth. Toda-Yamamoto and Wald-test causality tests have identified the direction of the causal relationship between these two variables in the case of Pakistan in the period between 1971 and 2008. Ng-Perron and Clement-Montanes-Reyes unit root tests are used to handle the problem of integrating orders for variables. The results suggest that the two variables are in a long run equilibrium relationship and economic growth leads to electricity consumption and not vice versa.

Suggested Citation

  • Shahbaz, Muhammad & Feridun, Mete, 2012. "Electricity consumption and economic growth empirical evidence from Pakistan," Greenwich Papers in Political Economy 8517, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:8517
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