Electricity Consumption and Economic Growth

The book examines Granger causality between electricity consumption and nominal Gross Domestic Product (GDP) for Pakistan using annual data covering the period 1971-72 to 2007-08. Augmented Dickey-Fuller test reveals that both the series, after logarithmic transformation, are non-stationary and individually integrated of order one. The authors find absence of long-run equilibrium relationship among the variables but there exists a unidirectional Granger causality running from economic growth to electricity consumption without any feedback effect. So, the energy conservation policies can be initiated without deteriorating growth process. Moreover, the book pours light on the causes of the real spurt in electricity demand and shortages in electricity supply.