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Emigrant’s remittances, Dutch Disease and capital accumulation: the case of Bangladesh

Author

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  • Taguchi, Hiroyuki
  • Shammi, Rifah Tamannah

Abstract

This paper examines varying macroeconomic impacts of international emigrant remittances in Bangladesh since 1976 by using a vector auto-regression (VAR) framework. Bangladesh has recorded better economic performance during last two decades, 1996-2014, compared to earlier two decades, 1976-1995. The time-series analysis therefore uncovers some transition in the remittance impacts composed of the “Dutch Disease” effect and the capital accumulation effect. The empirical results reveal the existence of the Dutch Disease effect for the first period, 1976-1995, but turned to show the positive impact on capital accumulation for the second period, 1996-2014. We speculate that the recent manufacturing-oriented policies together with institutional improvements have contributed to the transformation in the remittance impact towards a positive direction between two periods.

Suggested Citation

  • Taguchi, Hiroyuki & Shammi, Rifah Tamannah, 2017. "Emigrant’s remittances, Dutch Disease and capital accumulation: the case of Bangladesh," MPRA Paper 80703, University Library of Munich, Germany, revised Jun 2017.
  • Handle: RePEc:pra:mprapa:80703
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    References listed on IDEAS

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    More about this item

    Keywords

    Bangladesh; Emigrant’s remittances; Dutch Disease; Capital accumulation; Vector auto-regression estimation;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F39 - International Economics - - International Finance - - - Other
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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