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Application of the monetary policy function to output fluctuations in Bangladesh

Author Info

Listed author(s):
  • Yu Hsing

    ()

    (Southeastern Louisiana University)

  • A. M. M. Jamal

    ()

    (Southeastern Louisiana University)

  • Wen-jen Hsieh

    ()

    (National Cheng Kung University)

Registered author(s):

    Abstract

    Applying the monetary policy function, this paper finds that real GDP in Bangladesh is positively associated with real deprecation, real financial stock price, and world output and negatively influenced by the world real interest rate. The coefficient of the ratio of government consumption spending to nominal GDP is insignificant, suggesting that expansionary fiscal policy may not be effective.

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P60.pdf
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    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 29 (2009)
    Issue (Month): 3 ()
    Pages: 2113-2122

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    Handle: RePEc:ebl:ecbull:eb-09-00364
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    Keywords: monetary policy function; fiscal policy; real depreciation; stock price; world interest rate;

    Find related papers by JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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    1. M. Kabir Hassan & David R. Tufte, 1998. "Exchange rate volatility and aggregate export growth in Bangladesh," Applied Economics, Taylor & Francis Journals, vol. 30(2), pages 189-201, February.
    2. Jagdish Handa & Shubha Rahman Khan, 2008. "Financial development and economic growth: a symbiotic relationship," Applied Financial Economics, Taylor & Francis Journals, vol. 18(13), pages 1033-1049.
    3. R. Smyth & M. Nandha, 2003. "Bivariate causality between exchange rates and stock prices in South Asia," Applied Economics Letters, Taylor & Francis Journals, vol. 10(11), pages 699-704.
    4. Anisul Islam & M. Kabir Hassan, 2004. "An econometric estimation of the aggregate import demand function for Bangladesh: some further results," Applied Economics Letters, Taylor & Francis Journals, vol. 11(9), pages 575-580.
    5. Abdur Chowdhury & Minh Dao & Abu Wahid, 1995. "Monetary policy, output and inflation in Bangladesh: a dynamic analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 2(3), pages 51-55.
    6. Frederic S. Mishkin, 1995. "Symposium on the Monetary Transmission Mechanism," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 3-10, Fall.
    7. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 33(1), pages 125-132.
    8. K. A. Al Mamun & H. K. Nath, 2005. "Export-led growth in Bangladesh: a time series analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 12(6), pages 361-364.
    9. John B. Taylor, 1999. "A Historical Analysis of Monetary Policy Rules," NBER Chapters,in: Monetary Policy Rules, pages 319-348 National Bureau of Economic Research, Inc.
    10. John B. Taylor, 2000. "Reassessing Discretionary Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 21-36, Summer.
    11. David H. Romer, 2000. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 149-169, Spring.
    12. Jalal Siddiki, 2000. "Demand for money in Bangladesh: a cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 32(15), pages 1977-1984.
    13. Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
    14. Arusha Cooray, 2005. "Capital mobility: evidence from four South Asian economies," Applied Economics Letters, Taylor & Francis Journals, vol. 12(9), pages 577-581.
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