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Inflation and Economic Growth in Bangladesh: An Empirical Analysis by Using VAR Model

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  • Ziaur Rahman

Abstract

The main objective of this study is to examine the empirical relationship between inflation and economic growth in Bangladesh for the time period 1976 to 2011. In this study we use Vector Auto-regression (VAR) methodology to investigate the linkage between inflation and economic growth; trade openness and economic growth; and remittances and economic growth in Bangladesh. The major findings of the study shows that inflation and economic growth have a statistically significant negative relationship; remittances and economic growth have a statistically significant positive relationship, whereas a statistically negligible relationship find between trade openness and economic growth in Bangladesh. The findings of the study may be useful for monetary decision makers in Bangladesh to keep inflation rate at a reasonable rate which is consistent with economic growth in Bangladesh.

Suggested Citation

  • Ziaur Rahman, 2014. "Inflation and Economic Growth in Bangladesh: An Empirical Analysis by Using VAR Model," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(8), pages 404-420.
    • Handle: RePEc:asi:ajoerj:v:4:y:2014:i:8:p:404-420:id:3802
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    Cited by:

    1. Asaduzzaman, Md, 2021. "Relationship between threshold level of inflation and economic growth in Bangladesh- a multivariate quadratic regression analysis," MPRA Paper 110333, University Library of Munich, Germany, revised 02 Feb 2021.
    2. A H M Yeaseen Chowdhury & Md. Kaysher Hamid & Rowshonara Akter Akhi, 2019. "Impact of Macroeconomic Variables on Economic Growth: Bangladesh Perspective," Information Management and Computer Science (IMCS), Zibeline International Publishing, vol. 2(2), pages 19-22, October.

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