Relationship between Oil Consumption and GDP : A Study in India

The importance of oil in the economy of any country cannot be overemphasized. The oil shocks in the 1970s sent shockwaves to almost all the countries in the world, oil-importing countries in particular. Substantial literature has been developed basing on the role played by oil consumption in the growth of an economy. This paper contributes along the same lines for the case of India. We find a long run cointegrating relationship between real GDP and oil consumption and also a feedback effect between these variables