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Title Energy Governance and Selected Macroeconomic Indicators of Pakistan: A Time Series Analysis

Author(s) Ms Laila Rasheed

Abstract Affordable energy becomes an integral part of economic growth. Affordability of energy is determined by availability of energy and proactive governance measures at upstream, midstream and downstreams of energy system. Present study empirically investiages the impact of energy governance on three selected macroeconomic indicators of Pakistan economy during the period of 1985 to 2021.There is hardly a single study that measures downstream energy governance and estimate its impact on three macroeconomic indicators (external debt, unemployment rate and national income). The first objective is related to measurements of downstream energy governance. For this purpose, study uses three dimensions of downstream energy governance. Furthermore, six indicators from three dimensions are utilized to construct energy governance index. Principal Component Analysis (PCA) methodology is used to construct a composite variable of energy governance. After tackling the measurement issues of energy governance, the study uses an amended form of neo-classical production function as an econometric model in which study introduces energy governance as a determinant factor of macroeconomic indicators. There are three models that contain three different dependent variables which are unemployment, external debt, and gross domestic product. As study uses time series data and many series are nonstationary at level but are these are stationary at first difference. The study estimate the models with the help of autoregressive distributed lag (ARDL). The first model of study measures the impact of energy governance on externa debt. Energy governance has a negative impact on external in the long run as well as in the short run. On same token, energy governance has negative and statistically significant impact on unemployment rate of Pakistan. In last model, energy governance has positive and significant impact on gross domestic product of Pakistan. At the end, study suggests that efficient energy governance decrease the energy losses and better performance of macroeconomic variables. So policy makers should improve the quality of infrastructure of downstream energy system, and streamlining regulatory frameworks that lower the energy losses.

Type Thesis/Dissertation MS

Faculty Management Sciences

Department Economics

Language English

Publication Date 2023-12-27

Subject Economics

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