Causal Relationship of Energy Consumption and Economic Growth – A Case Study of Pakistan

This paper explores the causal relationship between energy consumption and economic growth in Pakistan, applying techniques of co-integration and Hsiao’s version of Granger causality, using time series data over the period 1965-2019. Time series data of macroeconomic determinants – i.e. energy growth, Foreign Direct Investment (FDI) growth and population growth shows a positive correlation with economic growth while there is no correlation founded between economic growth and inflation rate or Consumer Price Index (CPI). The general conclusion of empirical results is that economic growth causes energy consumption