financial development and economic growth: the role of energy consumption

The study investigates financial development and economic growth nexus, incorporating use of energy resources for pakistan for 1980- 2016, using johansen co-integration and granger causality approach. the results of johansen test for co-integration show the link between financial development, energy and economic growth in the long time span. the findings of granger causation test uncovered a two-way causality between capital and economic growth. the one-way causality exists from economic growth in energy and financial development. the findings also exposed the one-way causality from capital formation and exports to use of energy. the government should take steps to make financial sectors stronger as it has a great role in increasing the growth of an economy.