Monetary policy, output and inflation in Bangladesh: a dynamic analysis
AbstractThis paper investigates the relationship between money, prices, output, and the exchange rate in Bangladesh during the 1974-92 period. Several interesting conclusions can be derived from the paper. First, the inflationary process in Bangladesh cannot be explained exclusively by the monetarist or the structuralist explanation of inflation. Second, regardless of the monetary aggregate employed, monetary policy exerts a significant unidirectional impact on real output. Third, monetary policy and inflation together account for a significant portion of fluctuations in the exchange rate. Finally, it is noted that monetary shocks have a strong, but relatively short-run, impact on inflation. In light of these findings, it can be concluded that monetary policy in Bangladesh should be carried out with extreme caution. While tight money may put a short-term halt to inflation and help stabilize the foreign trade sector, it may also cause a slowdown in the economy.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 2 (1995)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandf.co.uk/journals/routledge/13504851.html
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kreiter, Zebulun & Paul, Tapas Kumar, 2010. "Deficit Financing and Inflation in Bangladesh: A Vector Autoregressive Analysis," MPRA Paper 45981, University Library of Munich, Germany.
- Paresh Kumar Narayan & Seema Narayan & Sagarika Mishra & Russell Smyth, 2012. "An analysis of Fiji's monetary policy transmission," Studies in Economics and Finance, Emerald Group Publishing, vol. 29(1), pages 52-70, March.
- Yu Hsing & A. M. M. Jamal & Wen-jen Hsieh, 2009. "Application of the monetary policy function to output fluctuations in Bangladesh," Economics Bulletin, AccessEcon, vol. 29(3), pages 2113-2122.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.