Pakistan: Energy Consumption and Economic Growth

Abstract

After the Arab oil embargo of 1973, oil prices rose rapidly and the energy importing economies experienced an exogenously determined real supply shock, which, in most cases, led to a fall in their rates of economic growth and a corresponding rise in the rates of inflation. The energy situation emerged as a serious issue and the relationship between energy consumption and economic growth came into sharp focus. The last decade has been a period of disequilibrium, structural adjustment and adoption of strategies to cope with the previously unknown phenomenon of stagflation.