Climate Change, Exchange Rate, Twin Deficit, and Energy Inflation: Application of VAR Model

The motivation behind the study is continuous fluctuations in energy prices Pakistan, so this aims to investigate role of a twin deficit, urbanization, climate change, production from oil and gas, exchange rate inflation. This utilized electricity capture inflation using time series data 1972 2021, World Development Indicators (WDI) Census Electricity Establishment (CEE). vector auto-regressive (VAR) model short-run long-run estimates. found that deficit have significant positive association with However, size impact greater on as compared prices. Furthermore, gas Moreover, results variance decomposition test indicate relative contribution budget (Model 1) than other modeled variables, while change 2), exogenous variables. helps policymakers devise policies control inflation, which affects well-being society.