Disaggregate Energy Consumption, Agricultural Output and Economic Growth in Pakistan

Abstract

The performance of an economy is generally measured by sustained rise in GDP growth over the period of time. The economic growth is the major goal of macroeconomics. According to neo-classical growth theory, the core factors of growth are labour and capital. In addition to these factors; technological progress, human capital development etc. are the most efficient factors of production. Development of technology and use of mechanisation in production process require energy at massive scale. So, energy has become a crucial factor of economic growth indirectly. Energy is widely regarded as a propelling force behind any economic activity and indeed plays a vital role in enhancing production. Therefore, highly important resources of energy will enhance the technology impact manifold. Quality energy resources can act as facilitator of technology while less worthy resources can dampen the power of new technology. Ojinnaka (1998) argued that the consumption of energy tracks with the national product. Hence, the scale of energy consumption per capita is an important indicator of economic modernisation. In general countries that have higher per capita energy consumption are more developed than those with low level of consumption.

Relating energy consumption to real sector value added and growth in a developing economy

“…Bangladesh, Brunei Darussalam, India, Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka and Thailand), and found a bidirectional causal effects between energy consumption and economic growth, indicating supports for the feedback hypothesis, meaning that productivity have strong interdependency with energy consumption. Similarly, in measuring the energy output relationship over short- and long-terms, Faridi and Murtaza (2013) analyzed the impact of energy consumption on economic growth and agricultural output in Pakistan. Findings of the study conclude that disaggregated energy consumption, economic growth and agricultural output are interlinked with each other in short as well as in long run.…”

Energy Consumption and Bi-Sectoral Output in Pakistan: A Disaggregated Analysis

“…Energy consumption and growth of agriculture sector and economy divulged a positive liaison in Pakistan. It was an efficient factor in growth of agriculture and economy as whole (Faridi & Murtaza, 2013). The energy use had consequential impact on urban economic growth in India (Mahalik & Mallick, 2014).…”

Research on Relationship Between Rural Residents' Income and Electricity Consumption Features

“…Some scholars subdivided energy consumption into gas, oil, electricity, and coal, in order to study their different effects on economic growth. Khan (2008) and Faridi (2013) had analyzed the impact of energy consumption on economic growth in both short and long term. Khan believes that electricity consumption is positively correlated with per capita real income in the short term, and the elasticity difference of energy consumption will have great impact on income level and related policies.…”