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Inflation and Financial Sector Correlation: The Case of Bangladesh

  • Abu N. M. Wahid

    (Department of Economics, Tennessee State University, USA.)

  • Muhammad Shahbaz

    (COMSATS Institute of Information Technology, Pakistan)

  • Pervaz Azim

    (Government College University Faisalabad, Pakistan)

This paper examines the impact of inflation on financial development in case of Bangladesh for the period of 1985-2005. In doing so, ARDL bounds testing approach and Error Correction Method (ECM) have been employed. Empirical findings reveal that high trends of inflation impede the performance of financial markets. GDP per capita promotes development of financial sector through its causal channels.

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Article provided by Econjournals in its journal International Journal of Economics and Financial Issues.

Volume (Year): 1 (2011)
Issue (Month): 4 ()
Pages: 145-152

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Handle: RePEc:eco:journ1:2011-04-1
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