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Electricity consumption and economic growth empirical evidence from Pakistan

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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.

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  1. COMSATS Institute of Information Technology, M.A. Jinah Campus, Lahore, Pakistan

    Muhammad Shahbaz

  2. Department of Banking and Finance, Faculty of Business and Economics, Eastern Mediterranean University, Gazi Magosa, Mersin 10, Turkey

    Mete Feridun

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  1. Muhammad Shahbaz
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  2. Mete Feridun
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Correspondence to Muhammad Shahbaz.

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Shahbaz, M., Feridun, M. Electricity consumption and economic growth empirical evidence from Pakistan. Qual Quant 46, 1583–1599 (2012). https://doi.org/10.1007/s11135-011-9468-3

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