Modeling Long Run Relationship of GDP General Government Net Lending & Borrowing Gross National Savings and General Government Revenue for Bangladesh

In this time series study, we attempted to model Gross Domestic Product (GDP) current price as a function of general government net lending and borrowing, gross national savings, and general government revenue for Bangladesh. Our interest in this paper is to show the long run relationship among these time series variables using time series data for Bangladesh. Given vector error term is negative but not significant we could not confirm the long-term relationship among the variables. Furthermore, we performed an ARDL approach to estimate the short run relationship among the variables. In this empirical analysis, we find that lag values of GDP have significant impact on current GDP. That means lag value of GDP two-years before from now has significant impact on current year's GDP in current price. The general government net lending and borrowing this year will have impact only after two years on GDP current price at a little above 10 percentage level, so we can say it is not having a significant effect on GDP. Current gross national savings has significant impact on current GDP along with the lag values of two-years before from now and four-years before from now of gross national savings have significant impact on current year GDP. However, general government revenue's impact on GDP overall could not be established.