This study examines the dynamic relationship between gas consumption (GC) and economic growth (EG) in Iran by using a multivariate model and including capital stock and labor as other explainatory variables for the period between 1972Q1 and 2012Q4. The results of the bound test demonstrate the presence of co-integration relationships among the variables. The estimated long-run impact of GC on EG is greater than other factor inputs suggest that energy is an important driver of production and growth in Iran. Furthermore, the results of causality test suggest that GC and EG are supplement. Given that GC is the most important source of energy in Iran, the entailment of this study is that gas conservation policies might harm growth and, therefore, the policy makers should improve the energy (gas) supply efficiency as well as formulate appropriate policies to attract foreign direct investment and establish private initiatives.
mohamadnejad N, heidari H. Relationships Between Natural Gas Consumption and Economic Growth Survey: Evidence from Iran. IJE 2015; 18 (2) URL: http://necjournals.ir/article-1-719-en.html