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The Remittance-GDP Relationship in the Liberalized Regime of Bangladesh: Cointegration and Innovation Accounting

Author

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  • Biru Paksha PAUL

    (State University of New York)

  • Anupam DAS

    (Mount Royal University)

Abstract

Bangladesh, being one of the top remittance-recipient countries in the world, has drawn attention to the remittance-output relationship in recent years. The results on this aspect are nevertheless inconclusive. Working on a relatively liberalized regime from 1979 to 2009, this study finds a long run positive relationship between remittances and GDP in Bangladesh. The adjustment of this relation, however, goes against traditional belief in that GDP does not respond to the movements in remittances while correcting disequilibrium after a shock in the system, but the reverse is true. There is no evidence on remittance-led growth in the short run. Innovation accounting shows that the impact of output on remittances is remarkably stronger than that of remittances on output. These findings have policy implications for other emerging nations in that GDP growth is capable of attracting further remittances arguably through increasing investment demand and initiating institutional reforms in the economy.

Suggested Citation

  • Biru Paksha PAUL & Anupam DAS, 2011. "The Remittance-GDP Relationship in the Liberalized Regime of Bangladesh: Cointegration and Innovation Accounting," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(9(562)), pages 41-60, September.
    • Handle: RePEc:agr:journl:v:9(562):y:2011:i:9(562):p:41-60
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    Citations

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    Cited by:

    1. Khan, Adnan & Mrs, Sultana, 2021. "International Remittances Literature: A Study in Bangladesh during the period of 1971-2020," MPRA Paper 108290, University Library of Munich, Germany, revised 2021.
    2. Syed Zeeshan Zafar & Muhammad Siddique & Haroon Ahmad & Tahir Ahmad Khan, 2016. "The Economic Implications of Remittances on Economic Growth: The Case Study of Pakistan," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(7), pages 215-222, July.
    3. Ali Emam , Md & Chen, Tinggui & Leibrecht, Markus, 2021. "Inward Worker Remittances and Economic Growth: The Case of Bangladesh," Asian Journal of Applied Economics/ Applied Economics Journal, Kasetsart University, Faculty of Economics, Center for Applied Economic Research, vol. 28(2), pages 43-62, December.
    4. Emon Kalyan Chowdhury & Bablu Kumar Dhar & Md.Abu Issa Gazi, 2023. "Impact of Remittance on Economic Progress: Evidence from Low-Income Asian Frontier Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 382-407, March.
    5. Florije Govori & Amant Fejzullahu, 2020. "External Financial Flows and GDP Growth in Kosovo," Journal of Developing Societies, , vol. 36(1), pages 56-76, March.
    6. Sarker Masud & Islam Shahidul, 2018. "Impacts of International Migration on Socio-Economic Development in Bangladesh," European Review of Applied Sociology, Sciendo, vol. 11(16), pages 27-35, June.
    7. Mduduzi Biyase & Mathias Manguzvane & Thomas Udiman, 2022. "Remittances And Economic Growth In South Africa: Applying Ardl Bounds Testing Analysis In The Presence Of Structural Breaks," Economics Working Papers edwrg-07-2022, College of Business and Economics, University of Johannesburg, South Africa, revised 2022.
    8. Soma Rani Sutradhar, 2020. "The impact of remittances on economic growth in Bangladesh, India, Pakistan and Sri Lanka," International Journal of Economic Policy Studies, Springer, vol. 14(1), pages 275-295, February.
    9. Anupam Das & Murshed Chowdhury, 2019. "Macroeconomic impacts of remittances in Bangladesh: The role of reverse flows," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 48(3), November.
    10. Khan, Adnan, 2020. "A Bibliography Search on International Migration and Remittances Literature during the period of 1971-2020: A Case of Bangladesh," MPRA Paper 108143, University Library of Munich, Germany, revised 2020.

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