Abstract—Even though a number of studies have attempted to determine the relationship between energy consumption and economic growth role of financial development has not been considered for efficient energy consumption. At present Pakistan is coping with a serious energy problem. This paper attempts to determine the nature of relationship between energy consumption, financial development and economic growth in Pakistan for the period 1980-2009 by employing co-integration and error correction techniques, finally Granger causality test is used to determine the direction of causality between financial development and energy consumption. The results indicate that financial development can be used as a useful measure to overcome energy problems by achieving efficiency in energy use.
Index Terms—Pakistan, energy consumption, economic growth, financial development, co-integration, error correction, granger causality.
Z. K. Kakar is with M.Phil Research Scholar, National University of Modern Languages, Islamabad, Pakistan(e-mail: firstname.lastname@example.org).
DR. B. A. Khilji is with Head of Economics Department, National University of Modern Languages Islamabad, Pakistan (e-mail: email@example.com).
M. J. Khan is with Lecturer of Economics, Department of Economics, Balochistan University of Information Technology, engineering and management sciences Quetta, Pakistan (e-mail: Muhammad.firstname.lastname@example.org).
Cite: Zaheer Khan Kakar, DR. Bashir Ahmad Khilji, and Muhammad Jawad Khan , "Financial Development and Energy Consumption:Empirical Evidence from Pakistan ," International Journal of Trade, Economics and Fiance vol. 2, no. 6, pp. 469-471, 2011.