The Application of Autoregressive- Distributed Lag (ARDL) Bound Testing in Determining Short and Long- Run Relationship Between Natural Gas Consumption and Economic Growth. (Case Study Iran)

In this study the dynamic relationship between natural gas consumption and economic growth using a multivariate model in Iran is examined. The variables used in article are economic growth, labor, capital, natural gas consumption and total factor productivity for the period of 1345-1391. Granger causality is conducted using Toda and Yamamoto (1995) procedure. Two-way Granger causality between natural gas consumption and economic growth, capital and economic growth as well as one-way Granger causality from capital to natural gas consumption and one-way Granger causality from economic growth and capital to total factor productivity are confirmed. ARDL bound testing confirmed the Long-run relationship among variables. Natural gas consumption and capital stock are two important factors in economic growth of Iran.