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Trade, Growth and Wage Inequality in Bangladesh

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  • Hiranya K. Nath

    ()
    (Department of Economics and International Business, Sam Houston State University)

  • Khawaja A. Mamun

    ()
    (Department of Economics and Finance, John F. Welch College of Business, Sacred Heart University)

Abstract

Using model selection technique based on out-of-sample predictive ability criterion in Vector Autoregression (VAR) framework to identify the ‘best’ model for growth, trade and wage inequality this paper examines the causal relations between these variables 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 two 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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Bibliographic Info

Paper provided by Sam Houston State University, Department of Economics and International Business in its series Working Papers with number 0605.

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Date of creation: Sep 2006
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Handle: RePEc:shs:wpaper:0605

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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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