Macro Economy of a Least Developed Country: The Case of Bangladesh

Bangladesh is one of the least developed countries. The economy of Bangladesh suffers from both supply side and demand side problems. This study has been undertaken with a view to investigate macro economic conditions of the country over the two sub periods period a) Sub period-1: Macroeconomic policy under administrative control i.e. 1976-77 to 1989-90; b) Sub period-2: Macroeconomic policy under reform measures i.e. 1990-91 to 2004-05. The study doesn’t find full applicability of either Keynesian or Monetarist view of the macro model for this country. Authors’ suggested that the performance of the Bangladesh economy is a mixture of accomplishment and failure, not significantly different from that of the majority of poor less developed countries and thus a coordinated approach to fiscal, monetary and exchange rate and debt management policy is required to achieve the long-term goal and sustainable economic growth with inflation within control. The first section of the paper provides the background to the literature review. Section two outlines the objective and explains the research methodology applied by gathering quantitative data. Section three explains the analysis of the data and results and section four provides policy implications and finally concluding comments.