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Trade, growth and wage inequality in Bangladesh

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  • Hiranya Nath
  • Khawaja Mamun

Abstract

Using model selection techniques based on out-of-sample predictive ability criterion in a Vector Autoregression (VAR) framework, this paper empirically examines the causal relations among growth, trade, and wage inequality in Bangladesh between 1971 and 2000. There is some evidence of bi-directional causality between growth and inequality and between trade and growth. That growth causes trade and that trade causes inequality are robust results. Furthermore, evidence strongly suggests that investment is important for trade, and the terms of trade between agricultural products and manufacturing products is an important causal determinant of both growth and trade.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190701600256
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 16 (2007)
Issue (Month): 4 ()
Pages: 505-528

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Handle: RePEc:taf:jitecd:v:16:y:2007:i:4:p:505-528

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Related research

Keywords: Bangladesh; trade; trade openness; wage inequality; out-of-sample predictive ability; mean squared forecast errors;

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Cited by:
  1. Kazi Arif Uz Zaman & Takahiro Akita, 2011. "Spatial Dimensions of Income Inequality and Poverty in Bangladesh: An Analysis of the 2005 Household Income and Expenditure Survey Data," Working Papers EMS_2011_20, Research Institute, International University of Japan.

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