Triangular Relationship between Energy Consumption, Price Index and National Income in Asian Countries: A Pooled Mean Group Approach in Presence of Structural Breaks

Authors

  • Bilal Mehmood Department of Economics, Government College University, Lahore, Pakistan
  • Syed Hassan Raza Department of Economics, Lahore Leads University, Lahore, Pakistan
  • Mahwish Rana Department of Economics, Lahore Leads University, Lahore, Pakistan
  • Huma Sohaib
  • Muhammad Azhar Khan

Abstract

Energy consumption is a key factor in economic activity. To ascertain its role in economic growth, this study empirically investigates its role for Asian countries. Price index is also included in analysis as factor of economic growth. We examine and quantify this long run relationship for a sample of selected Asian countries with data on relevant variables for a large time dimension (1970 to 2012). Econometric precision is brought by using pooled mean group (PMG) besides other Pedroni, Kao and Westerlund panel cointegration tests. PMG being heterogeneous panels estimation technique allows the slope and short run parameters to vary across the countries. Structural breaks are also incorporated to observe the impact of shocks that leave permanent effect on national income. Results show the presence of long run relationship between energy consumption and national income. The positive contribution of energy consumption is quantified using Fully Modified OLS and dynamic OLS as well. Policy recommendations are made on the basis of empirical analysis.

Keywords: Energy consumption; National income; Price index; Pedroni Cointegration; Kao Cointegration; Westerlund Test; Structural breaks

JEL Classifications: C23; E31; E39; Q43; P44

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Author Biography

Bilal Mehmood, Department of Economics, Government College University, Lahore, Pakistan

I have graduated the Master in Economics in 2003. I obtained an MPhil degree in 2006 in Economics from GC University, Lahore, Pakistan. My PhD is from GC University, Faisalabad. I hold Diploma in Information Technology from Punjab Information Technology Board, Pakistan. I am awarded of The Gold Standard of International Award for Young People, The Duke of Edinburgh Award. I am a participant of International Growth Centre (IGC) Pakistan, a policy consortium set up by the London School of Economics (LSE) and Oxford University. Currently, I am serving GC University, Lahore, Pakistan as a senior lecturer in Department of Economics. I have conducted and edited Survey projects with Punjab Small Industries Corporation under Government of The Punjab, Pakistan. I am the author of 39 articles and 2 books in the fields of ICT economics and knowledge economy. My research work is mainly empirical in nature and spans from primary data studies to secondary data studies. My work is published and forthcoming in Romanian Review of Social Sciences (RRSS), Oeconomics of Knowledge and Romanian Economic Journal (REJ), African Journal of Business Management, International Journal of Academic Research, Actual Problems of Economics, Economic and Business Review, Empirical Economics Letters, Forman Journal of Economic Studies, Zagreb International Review of Economics & Business, Romanian Economic Business Review, Informatica Economica, Academicia, Information Technology for Development, Information Technology and International Development and Panoeconomicus among others. I am also a member of Editorial Board of SAARJ Journals, India. My work includes the role of new factors of growth in development of UDCs. Other specific areas include Operations Research, Aviation economics, Port economics, Media economics, Gender economics, Digital economics and Knowledge economy among others.

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Published

2014-08-28

How to Cite

Mehmood, B., Raza, S. H., Rana, M., Sohaib, H., & Khan, M. A. (2014). Triangular Relationship between Energy Consumption, Price Index and National Income in Asian Countries: A Pooled Mean Group Approach in Presence of Structural Breaks. International Journal of Energy Economics and Policy, 4(4), 610–620. Retrieved from https://econjournals.com/index.php/ijeep/article/view/862

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