Disaggregate Energy Consumption, Agricultural Output and Economic Growth in Pakistan

The basic goal of the study is to make a vigorous endeavour to analyse the impact of energy consumption (i.e., electricity, oil and gas) on economic growth and agriculture sector output in Pakistan. It is desirable to find out relationship between disaggregate energy consumption, economic growth and agricultural sector outputs of Pakistan because energy crisis has become a central issue now-a-days. Production sector of Pakistan relying on electricity and gas consumption to large extent and these sources of energy are falling short because of many reasons which is upsetting output and consequently exports and real output of the country. To analyse the relationship, we employed time series data ranges from 1972 to 2011 from a reliable source. To find out long run and short run effects of energy consumption on Agricultural output and economic growth, ARDL modelling approach to cointegration is applied which is most appropriate technique over some other techniques of integration after scrutinizing the stationarity of data through ADF Test. Where, bound testing procedure is utilized for cointegration to judge the existence of long run relationship among variables and ECM models are formulated for short run analysis. Our econometric models give the intuition of including agricultural output and economic growth as dependant variables and electricity, coal and gas consumption as independent and core variables. The findings of the study indicate that Gas and Oil consumption turns out very efficient factors for raising economic growth and Agricultural output